- Mental battles
- Communication problems
- Leadership obstacles, etc…
Entrepreneurial Statistics OverviewIn the last 15 years, global entrepreneurship has boomed. The pursuit of entrepreneurship has become almost a trendy trend. It is because of many things, such as how easy it can be to start a business.
Worldwide EntrepreneursEntrepreneurs around the world are motivated by the opportunity to build a business based on a passion. Around the world, there are 582 million entrepreneurs. Entrepreneurs are always looking for new ways to improve a niche or change an industry completely.
Entrepreneurs in the United StatesIn the United States alone, there are over 31 million entrepreneurs. This is:
- 9.29% of all population
- 18,86% of US workers
Self-Employed EntrepreneursThe dream of working in a top-level corporate role is now a thing of the past. 97% of self-employed professionals claim they will never return to ” traditional employment.” It is hard to resist the lifestyle that you can have as an entrepreneur, especially if you are your boss.
Corporate To EntrepreneurshipMost entrepreneurs have worked in corporate environments before becoming entrepreneurs. In reality, 58% of entrepreneurs had a corporate position before they started their own business.
Start A BusinessThere are two ways to start a business.
- Franchises or existing businesses can be purchased.
- Create your own business from scratch.
Family Run BusinessAbout one-fifth of entrepreneurs manage or own a business together with family members. Families still run businesses. Many parents want to pass on the company that they have built to their children and so forth.
What Motivates People To Be Entrepreneurs?Entrepreneurs have many reasons for starting their businesses. You can create a small business for a variety of reasons, from lifestyle choices to just being naturally interested. The top three reasons why people today become entrepreneurs.
They are their bossWho doesn’t like to be in control? 55% of entrepreneurs cite the desire to be their boss as the main reason for starting a business. Entrepreneurs want to have the final say in their work.
Follow their passionsIf you are not enjoying your job, you should quit. The freedom to choose is important for many entrepreneurs who are just starting. 39% of entrepreneurs claim that they started their business because they wanted a way to follow their passions.
Take Advantage of an OpportunityOpportunity is key to a successful business. Twenty-five percent of entrepreneurs claim that they jumped because an opportunity presented itself. Entrepreneurs must have the courage to seize opportunities when they arise.
Other ReasonsOther circumstances beyond their control can force entrepreneurs into starting their businesses.
- 25% of entrepreneurs want to escape the corporate world.
- After being laid off, 11% of people started their businesses.
What qualifications do entrepreneurs have?Who can be an entrepreneur? You’ll learn that you can be an entrepreneur by looking at the next set of statistics. Let me let you in on something – You don’t have to get a fancy degree from an expensive business school.
High School and College Degrees30 % of entrepreneurs have only a degree from high school. This means that almost 1/3 of entrepreneurs have never attended college. If you’re not a college graduate, then you’re certainly not the only one in the world of entrepreneurship.
Master’s DegreeOnly 18% of entrepreneurs who own small businesses have a master’s. Higher education qualifications in the world of entrepreneurship are losing their value. The cost of a master’s degree is high, and it does not correlate with success. The real key to success is experience, perseverance, and commitment.
Doctorate (PhD).Doctorate degrees are very rare among entrepreneurs. It is likely that:
- Time is a factor.
Business degrees are available.Would it make sense to those entrepreneurs with a bachelor’s degree who choose entrepreneurship? This is not true. Only 9% have a bachelor’s degree in business.
What Are the Most Popular Careers for Entrepreneurs?Entrepreneurs can be found in every industry. These next statistics on entrepreneurship highlight the most popular industries.
1 – ConstructionConstruction has become a popular business for entrepreneurs. Construction creates many different opportunities and jobs. Construction is the industry where 19.6% of independent professionals are employed. This is almost twice as popular as the second most popular industry.
2 – RetailThe retail industry is ranked second. Retail is the workplace of 10.9% of self-employed professionals. It can range from retail consulting to owning your retail store.
3 – Real EstateClosely behind, in third place, is real Estate. Real Estate is the industry in which 10.7% of independent professionals are employed. Entrepreneurs seem to be a good fit for the real estate industry.
What Are the Best countries for entrepreneurs?There’s no secret about the fact that some countries inspire more entrepreneurship than others. How can you measure the entrepreneurial spirit in different countries and regions? The Global Entrepreneurship Index. The GEI measures the health of entrepreneurship ecosystems across 137 countries. Simply put – it ranks each country and determines the best countries for entrepreneurs. Each country is assigned a GEI Score between 0 – 100. The higher the score, the better it is to be an entrepreneur. The Global Entrepreneurship Index ranks the top 5 countries in the world for entrepreneurs.
United States of AmericaThe US is known for its continuous innovation and entrepreneurial spirit. It’s no surprise that they are at the top. The US is the best country for entrepreneurs in the world, with a GEI score of 83.6.
SwitzerlandSwitzerland may not have been the obvious number 2. It has a GEI score of 80,4, making it the second-best country in the entire world for entrepreneurs. Recent years have seen a significant increase in the number of small businesses in Switzerland. The country has a robust economy and an excellent infrastructure, which provides many opportunities for entrepreneurs.
CanadaCanada is ranked third with a GEI score of 79.2. The Canadian government has a strong focus on small businesses and offers entrepreneurship visas as a way for non-citizens to enter the country. This is a great way to attract entrepreneurs with talent from abroad.
The United KingdomWe Brits can make money from anything. The UK is comfortably ranked fourth with a GEI score of 77.8. The UK is a country with a highly skilled workforce, and it has favorable business laws that promote innovation and startups.
AustraliaAustralia has a GEI of 75.5. The general Australian population is very skilled, and past governments have provided very favorable small business regulations. Australia also has a very strong economy for business owners to operate in.
How Do Entrepreneurs Finance Their Small Business?Regardless of what business you start, you will need some capital to finance it. Thankfully, the amount of technology available today means you can begin businesses with a relatively small investment. Here are some small business statistics on how they are generally financed.
Their Cash39% of business owners use their cash to start their small businesses. This is the most popular way for entrepreneurs to fund their new startups.
Retirement MoneyThe second most popular way for entrepreneurs to fund their new businesses is with saved retirement money. 20% of entrepreneurs use some or all of their retirement funds to start a business.
Friends & Family10% of entrepreneurs ask friends and family for startup capital. Friends and family are the go-to if you don’t have the money or require a bigger investment.
Loans & Credit24% of small business owners and entrepreneurs rely on business loans and credit. Most of these loans come from traditional banks, private small business lenders, and family and friends.
CrowdfundingCrowdfunding sites like Kickstarter have been growing in popularity. However, just 1% of entrepreneurs use crowdfunding as a way to generate initial startup capital for their business. Crowdfunding is typically more successful for businesses that bring entirely new and innovative ideas to market.
What Are The Chances Of Success & Failure For Small Businesses?Business can be risky. Especially when you are just getting started. 2 out of 3 business owners said their first year in business was the most difficult. So, if you are planning to put it all on the line to start your own business, pay attention to these success and failure entrepreneurial statistics.
After 1 Year80% of small businesses are still in operation after one year. That means that only 20% of small businesses fail within their first year. The statistics look good for the average first-year small business owner.
After 5 YearsBut what about after five years? Only half (50%) of the small businesses are estimated to survive 5+ years. You can interpret this by saying the average business has a 1 in 2 chance of making it past the 5-year mark.
Historical Small Business FailureThe good news is that small businesses are far more likely to be successful today than they were 50 years ago. Small Business failure has declined by over 30% since 1977. With new technology and cost-efficient ways to do business today, you have a lot more tools and resources around you to help you succeed.
What Are The Main Reasons Why Small Businesses Fail?Small business owners face a lot of challenges – particularly when they are just getting started. Here are the three reasons most small businesses and entrepreneurs fail.
Reason #1 – No Market NeedEntrepreneurs are notorious for getting over-excited about their ideas. Often too excited… 42% of small businesses fail because they don’t have a market for their products or services. If there is no want for your idea from your target audience… : No one will buy. It might seem too obvious to be true, but this is the number 1 reason small businesses fail. Market research can easily be an afterthought, but it’s important to put it first and make sure people actually want what you are selling.
Reason #2 – Lack Of FundsIf Rome couldn’t be built in a day – businesses can’t either. Most businesses don’t make money from day one, and it can take months to years before they see any real profit. That’s what makes getting enough funding and staying on top of your business’s finances so important. 29% of businesses fail because of the lack of funds. This has been the main issue during COVID-19.
Reason #3 – Employees Issues23% of businesses fail because of the lack of chemistry and teamwork between employees. Hiring the right team members and setting up a business culture they can get behind is a great way to increase your success in business. Otherwise, a bad team culture could lead to failure.
What Are The Biggest Challenges For Entrepreneurs?One of the biggest things that entrepreneurs do is solve problems for their market with the products or services they offer. But when it comes to running the business itself, these are the three big challenges that entrepreneurs face.
1 – Finding StaffHaving skilled employees who enjoy their work is an essential part of scaling and growing your business. 27% of entrepreneurs say finding talented Staff and contractors is their biggest challenge.
2 – Acquiring New CustomersFor 23% of entrepreneurs, acquiring new customers is their biggest challenge. Marketing and sales are skills that not all entrepreneurs have. But they are essential for running a thriving business and growing revenue.
3 – Finding Money To Invest In Their CompanyA lot of entrepreneurs have great ideas. But to get those ideas off the ground, you need funding. 22% of entrepreneurs struggle to find financing for their companies and ideas.
What Do The Demographic Statistics Say About Entrepreneurs & Small Business Owners?One of the great things about entrepreneurship is the diversity of business owners all over the world. Regardless of where you come from or how old you are, anyone can be an entrepreneur.
Age Breakdown Of New EntrepreneursEntrepreneurs seem to be getting younger and younger. But that isn’t necessarily the case. Here are the entrepreneur statistics on age: AgeStarted Business 2019/2020 (%) 18 to 24 16% 25 to 34 22% 35 to 44 22% 45 to 54 13% 55 to 64 13% 65 to 74 6% This is an age breakdown of the percentage of Americans who started a business in 2019 and 2020. The 18 to 24 age bracket is the third biggest for US entrepreneurs starting new businesses. The most popular age to start a business in the US is between 25 and 44. A total of 44% of all companies formed in 2019/2020 were in this age group. Interestingly enough – younger people are more likely to start a business from scratch, while older people are more likely to buy an established business instead. Just 6% of Americans who started a business in 2019/2020 were in the 65 to 74 age group.
Men In EntrepreneurshipIn the US, there are more male entrepreneurs than female entrepreneurs. For every ten male entrepreneurs, there are just seven female entrepreneurs. What’s more? Studies show that middle-aged men who start businesses are most likely to be successful. Of high-performing startups in the top 0.1% in terms of growth in the first five years, the average entrepreneur started their company when they were 45 years old. Most successful business owners usually start their businesses later in life. A 50-year-old male startup founder is 2.8 times more likely to have a successful startup than a 25-year-old male founder. : The more experience small business owners have before starting their businesses, the more likely they will be successful.
Women In EntrepreneurshipWomen-owned businesses have been growing significantly over the last ten years. Globally, there are 252 million women-owned businesses and entrepreneurs today. As of 2019, there were 13 million women-owned businesses in the US alone. And over 5.5 million of those 13 million businesses are owned by women from minority groups… …That’s almost 50%! In the US, African-American women make up 19% of the total number of women-owned businesses. Latinas own 15%, and Asian-American women own 9%. Impressive! Clearly, minority women in entrepreneurship in the US are not only growing but are also very successful. 16.6% of adult women under the age of 65 in the US started a new business in 2019. This is compared directly with 18.3% of men in the US within the same age group. Female entrepreneurship is growing just as strongly as male entrepreneurship. The most popular industry for women-owned small businesses is retail. The earnings gap between men and women entrepreneurs in the US is still significant. On average, female entrepreneurs earn 28% less than male entrepreneurs.
Minorities In EntrepreneurshipLet’s take a look at some minority entrepreneurship statistics. Currently, there are over 8 million minority-owned small businesses in the United States:
- 64% of all entrepreneurs in the US are white males and females.
- 14% of entrepreneurs are African Americans.
- 8% of entrepreneurs are Latino or Hispanic.
Wrapping It UpIf there is one thing that all these entrepreneurship statistics tell you, it’s that… Anyone can do it! Regardless of your background, upbringing, and current circumstances – You can do it. But that doesn’t mean it will be an easy road to success. You will have to deal with: