Over the last year the way we work has changed at a fundamental level. The pandemic has reshaped how people approach their jobs while also pushing many folks to venture out on their own, sometimes because of a newly sparked interest in entrepreneurship and other times because of necessity. This article takes a look at essential entrepreneur statistics in 2023, painting a picture of the good and bad, and pointing towards upcoming trends for the future of entrepreneurship in America.
1. How many entrepreneurs are there worldwide?
There are approximately 582 million entrepreneurs across the globe.
With the rise of entrepreneurs like Tim Ferris and Chris Sacca the idea of the self-made businessman has captured the minds of folks across popular culture. The celebrity-esque status of many entrepreneurs worldwide has sparked a rise in folks starting their own small businesses, side-hustles, and start-ups. According to this article in The Hill, there are approximately 582 million entrepreneurs across the globe. The number is taken from a survey by The Global Entrepreneurship Monitor that surveyed 65 different economies worldwide.
2. How many entrepreneurs are there in America?
There are over 31 million entrepreneurs in America.
The United States is known as the land of opportunity. More than any other country on earth America prides itself on fostering the conditions necessary for huge companies to grow, allowing people to make their dreams into a reality, and make boatloads of money in the process. That’s why it isn’t surprising that there are over 31 million entrepreneurs in America, according to the Global Entrepreneurship Monitor. In 2021, the most recent year for data, there were nearly 840,000 businesses in America under one year old. The numbers have consistently trended upwards since 2005. In 2019, the rate of new entrepreneurs in the U.S. was 0.31 percent, or 310 individuals per 100,000 adults.
3. How many entrepreneurs are successful at running their business?
About 35% of businesses remain in operation by their tenth year, 18.4% go under by their first year, and nearly 50% go under in their fifth year.
There are new businesses across America starting every day, but just because you’ve made the leap to start your own business doesn’t mean that you’re going to be successful at it.
About 20% of small businesses fail within their first year. That number increases progressively as time goes on. Almost 50% end up failing in their fifth year. By the tenth year, less than four of 10 businesses that started up remain in operation.Want to keep your business going? Having a better banking account can definitely help.
4. How do entrepreneurs fund their business?
- 66.3% use their personal funds.
- 27.6% finance with income from another job.
- 11.3% borrow from friends and family, and 6.4% use donations from friends and family.
- 11.2% use a bank loan.
- 9% use a credit card cash advance.
- Less than 4% use investors, grants, and crowdfunding.
If you’re starting a new small business, you’re going to need some capital. There are many different ways you can get money for your new venture. Maybe that’s putting in the cash yourself. Maybe it’s asking friends and family to pitch in or doing a pre-order for one of your products to cover upcoming production costs.
Let’s take a look at funding for entrepreneurs.
Entrepreneur statistics say 58% of small businesses in the U.S. start with less than $25,000, and one-third start with less than $5,000. Cash is the most popular small business financing method in the U.S, with 37% of owners using it to start their businesses. 11% of small business owners in the U.S. rely on family or friends—or their bank—to finance their businesses. Less than 4% of entrepreneurs use investors, grants, or crowdfunding to get their business off the ground. 9% of small business owners in the U.S. use unsecured loans, and 6% use U.S. Small Business Administration loans to start their businesses.
5. Which businesses have the highest success rate?
Finance, insurance, and real estate businesses have the highest success rates.
When starting up your own business, you want to put yourself in the position to have the highest rate of success. While it’s always fun to follow your dreams — and you’re able to work the best when your heart is in what you’re doing — there are some businesses that are prone to making more money than others.The businesses with the highest pound for pound success rates are finance, insurance, and real estate — 58 percent of these businesses were still operating after four years.
6. How much does the average entrepreneur make?
According to PayScale’s salary database, the average entrepreneur makes around $64,000 per year.
That’s about $33,000 less than the average American salary of $97,962, but close to the median salary of $69,717. While starting your own company can be a big risk, you can enjoy working for yourself and pursue your passions, and will likely still make close to the median American income.
7. What percentage of businesses are profitable?
Over 65% of small businesses are profitable.
If you’re starting a small business chances are it is because — among other reasons — you are trying to make some money. But how many entrepreneurs creating small businesses actually get paid?
Over 65 percent of small businesses are actually profitable, which is a significant improvement from years past—but that often requires a major time commitment from entrepreneurs.If you’re looking for a business banking account to help cut down the time you spend dealing with your financial life, you should sign up for NorthOne. That way you’ve got more time to make sure your small business Is turning a profit.
8. How many entrepreneurs are self-made?
While there aren’t clear statistics on the number of self-made entrepreneurs, just under 70% of American billionaires are self-made.
You may think that to start your small business you have to have wealthy connections, people who own yachts and have opinions about jet lag. But that’s not entirely true!
Nearly 70% of the most recent Forbes 400 list qualify as being self-made. And while around two thirds of self-made billionaires were born into middle-class, upper middle-class, or wealthy households, 7% either lived below the poverty line or faced financial adversity earlier in life. Those big numbers can motivate big dreams, and point towards folks earning massive incomes through following through on powerful ideas.
9. Why do most entrepreneurs start their own businesses?
More than 60% of small business owners start their small businesses because they’re inspired to be their own boss and create something from the ground up.
There are plenty of good reasons to venture out on your own and start your small business. But for the majority of entrepreneurs their reasoning is simple. They want to be their own boss. Stats from Guidant showed that this is the case for more than half of small business owners. Research also showed that many were inspired by the idea of creating something from the ground up. Unemployment inspires just under 25% of entrepreneurs to start their businesses, while 47.64% cited dissatisfaction with corporate America.
10. How many people do small businesses employ?
As of 2023, 61.7 million people are employed by small businesses. 46.4% of the U.S. private (non-government) workforce are employed by small businesses.
If you’re starting up your small business, you may dream of having huge offices with hundreds of employees doing the bidding of yourself and your company. You may have visions of neon signs with the word hustle on the wall and potted plants littered around an open concept loft. The reality can be a bit different.
Over 80% of small businesses have no employees at all. It’s a one person shop running the show. But just because you haven’t got a slew of underlings to boss around doesn’t mean that you can’t crush it. Being the only employee also means that you’re taking in all of the profits. And that’s a good thing!
11. What percentage of entrepreneurs are college educated?
44% of entrepreneurs have a college degree.
A solid education can give you skills and connections that may definitely help you make strides with your business ventures. But a college degree isn’t a necessity for getting ahead or starting your own entrepreneurship adventures.
In fact less than half of small business owners have a college degree at all. Percentage wise just 44% of entrepreneurs have a college degree. While it can certainly be useful to have some higher education when starting up your company, it isn’t something you need in order to be successful. Most people don’t have that background at all.
12. Why do most entrepreneurs fail?
42% of businesses fail due to lack of demand for their product or service.
According to the entrepreneur statistics research done by Forbes, 42% of businesses fail for the simple reason that there was no real market needed for what they were trying to sell. The second most common reason is the lack of funds. That impacts 38% of businesses that fail.
Before starting your business it is important to make sure that there are actually going to be customers for whatever it is you’re trying to sell. That can seem basic but it is an important step. Don’t get too far ahead of yourself.
13. How happy are entrepreneurs after starting a business?
Starting your own business can be challenging and stressful—but entrepreneurs are surprisingly happy about it. Nearly 75% of business owners reported that they were either very or somewhat happy.
Only about 15% reported they were somewhat or very unhappy, and 10% reported themselves as neutral. The overall self-reported happiness rate clocked in at 3.95 on a scale of one to five, with one being “very unhappy” and five being “very happy.” That’s pretty encouraging news for anyone thinking about starting their own company.
14. How many Americans are considering becoming an entrepreneur?
About 40% of traditionally employed Americans are considering becoming an entrepreneur, saying it’s “somewhat likely” they’ll work for themselves within the next two years. People under 35 and the highly educated are even more likely to consider entrepreneurship, at a rate of 50%. That’s a shockingly high number—and oddly enough, the more satisfied a traditionally employed person is at work, the more likely they are to consider self-employment.
15. How diverse are entrepreneurs in America?
When it comes to demographics, male entrepreneurs lead the pack. 77.5% of small business owners are men, 23.4% are women, and 0.2% describe as nonbinary or another gender. Nearly 85% are white, with the next largest group being a three-way tie between Black, Latino, or Asian owners at about 4% each.
16. What are the biggest costs for entrepreneurs?
Labor is the biggest cost for businesses, accounting for about 70% of a company’s budget. That’s why layoffs and outsourcing are so popular when a company needs to rein in their spending. Inventory is the second highest cost, averaging about 17 to 25%. Because this is a large upfront cost for most businesses, especially small ones, many entrepreneurs choose to do smaller minimum quantity orders or drop shipping.
17. How did the COVID-19 pandemic affect entrepreneurship?
95% of people currently self-employed intend to stay that way, which was unchanged from pre-COVID statistics—and of the traditionally employed people who believe that they’ll be self-employed in two years, 84% of them cite COVID as at least one of the reasons why. 63% of people who started small businesses during the pandemic believe that self-employment is the best career option in uncertain times. In other words, COVID actually boosted entrepreneurship, and will likely continue to do so.
18. Which industry will see the most job growth in the next decade?
Currently, the home health and personal care industry is expected to grow the most over the next ten years, at a staggering rate of 924%. Part of that is because the aging population is becoming disproportionately larger than younger generations. When you’re considering starting your own business, choosing a growing industry is wise—you’re more likely to overcome the failure rates cited above.
19. How hard is it to hire new employees as a small business owner?
We’ve all head about the Great Resignation and “quiet quitting”—so how has that affected the hiring landscape for entrepreneurs? Over 70% of respondents said that hiring was somewhat or very difficult, compared to previous years. In response, about 63% of small business owners have increased compensation. Increasing benefits, hiring bonuses and expanded recruitment efforts were also popular among entrepreneurs.
20. How well does advertising work for entrepreneurs?
Surprisingly, advertising makes up for just 1% of the average business’s revenue. That’s such a low amount—possibly due to the fact that 55% of businesses now use social media. Pay-per-click ad platforms ensure that businesses only pay when users click on their ads. Plus, social media advertising is accessible and easy to use, making it possible to advertise on just about any budget.
1. The Hill: Entrepreneurship Equality Report
2. Global Entrepreneurship Monitor: Millions Are Entrepreneurs in the United States; Statista: Businesses in the U.S.
3. Lending Tree: The Percentage of Businesses That Fail and How to Boost Your Chances of Success
4. Score: How Do Entrepreneurs Finance Their Startups?
5. IBISWorld: Most Profitable Industries in the US in 2023
6. PayScale: Average Small Business Owner / Operator Salary; The Ascent: Are You Well-Paid? Compare Your Salary to the Average U.S. Income
7. Chamber of Commerce: Small Business Statistics
8. Forbes : The 2022 Forbes 400 Self-Made Score: From Silver Spooners To Bootstrappers
9. Guidant: 2022 Small Business Trends
10. Forbes: Small Business Statistics 2023
11. CNBC: Business Owner College Degree Survey
12. Forbes: Small Business Statistics 2023
13. Guidant: 2022 Small Business Trends
14. FreshBooks: 2021 Annual Self-Employment Report
15. Guidant: 2022 Small Business Trends
16. Forbes: Small Business Statistics 2023
17. FreshBooks: 2021 Annual Self-Employment Report
18. Forbes: Small Business Statistics 2023
19. Guidant: 2022 Small Business Trends
20. Forbes: Small Business Statistics 2023