Entrepreneurship Facts

Entrepreneurship Facts & Statistics

An entrepreneur plays a vital role in driving the economy forward. As our collection of entrepreneurship facts below show they bring new ideas and products into the market using their skills and personal drive. The entrepreneur sets up a business, bears the most risks, and enjoys rewards accordingly. In most cases, especially in the early stages of business, the entrepreneur is directly responsible for continued innovation, procurement of raw materials, production, and sales of products.

Entrepreneurship is challenging, but those who scale through the start-up phases and become successful can look to enjoy fame, profits, and more growth opportunities. This article brings you 29 facts about entrepreneurship that you should know to inspire your own journey or encourage others.

How many people are entrepreneurs?

#1 - In the United Arab Emirates, the United Kingdom, and Australia, more than 8% of adults involve themselves in entrepreneurial activities1 

#2 - Only 1 in 10 adults in Japan see good opportunities to start a business1 

#3 - 2% of adults in Puerto Rico, Egypt, Mexico, and Oman have established themselves as Business Owners1 

#4 - 20% of adults in Madagascar are Established Business Owners1 

#5 - 16% of adults in Brazil are Established Business Owners1 

#6 - 15% of adults in Guatemala and Ecuador have established themselves as Business Owners1 

#7 - 14% of adults in Greece are Established Business Owners1 

Starting out from home

#8 - 69% of U.S. entrepreneurs start their businesses at home2 

A recent survey in the US showed that many people start a business at home and continue to operate from home even after the company is financially buoyant. Someone who runs a business from home saves money on high overhead costs like rent.

A home-based business may benefit women who have to combine duties as an entrepreneur and their role as the primary caregiver in the home. 

It is easy to assume that only sole proprietors can work from home, but evidence shows that many of these home-based businesses have employees. The internet has made it possible to create a shared virtual working space, and entrepreneurs are taking advantage of that. 

Therefore, an overcrowded home is not a problem, and it can help the entrepreneur maintain a work-life balance. An entrepreneur who works from home can use social media apps like Facebook, Instagram, Pinterest in addition to Email as marketing tools. 

Entrepreneurship facts & demographics

Entrepreneur facts begin
Photo by Danielle MacInnes on Unsplash

#9 - For every female entrepreneur in Egypt, Norway, North Macedonia, Japan, and Pakistan, there are more than two male entrepreneurs1 

#10 - 73% of small-scale entrepreneurs in the US are male2 

#11 - 25% of small-scale entrepreneurs in the US are female2 

#12 - 71% of aspiring Gen X small business owners are men3 

#13 - 29% of aspiring Gen X small business owners are women3 

#14 - 74% of boomer aspiring entrepreneurs are men3 

#15 - 26% of boomer aspiring entrepreneurs are women3 

Entrepreneurship facts and statistics across age groups and many regions show a significant gap between the number of men and women who venture into starting and owning their own businesses.

#16 - 50-59 years olds make up most US entrepreneurs2 

Age is not a limiting factor in determining which people get to be entrepreneurs. However, due to prevailing circumstances like credit history, experience, peer interest, responsibilities, and others, entrepreneurship rates differ remarkably among age. 35% of entrepreneurs in the United States are between the ages of 50-59, and they make up the largest percentage of entrepreneurs.

People above 70 only account for 4% while people between ages 60-69 make up 18%. Entrepreneurs between 30-39 years old are estimated at 14%, while 40-49-year-olds have a 25% presence in entrepreneurship. 18-29-year-olds only have a 4% representation in small business ownership. 

Entrepreneur facts about success rates & longevity

#17 - Of all small businesses started in the US in 2014, 80% made it to their second year2 

#18 - Of all small businesses started in the US in 2014, only 56% made it to their fifth year2 

A lot of people who go into entrepreneurship don't make it past the first five years. 80% of businesses established in 2014 made it to the second year, but only 70% made it to the third year. Only 62% made it to the fourth year, and 56% survived to the fifth year. According to entrepreneurship statistics, the failure rate for businesses that make it to the fourth year is 44%. 

Some reasons businesses fail include zero or inadequate market need, low funds, draining partnerships, competition, and poor pricing strategy. Other reasons are lack of business model, poor marketing, poor customer relations, and incorrectly timing product releases.

Education & entrepreneurs

Photo by Daria Nepriakhina on Unsplash

#19 - Only 29% of US entrepreneurs report having a bachelor’s degree2 

Being a successful entrepreneur is one of the few things someone does not need a college degree or certified business education. 33% of US-based entrepreneurs stopped their educational journey at high school.

Entrepreneurship stats showed that 82% of entrepreneurs were confident they had the experience and qualifications needed to run a business. This does not indicate that a college degree will make you less successful as an entrepreneur. 

Some essential things you need apart from a good idea are marketing skills, understanding business types, and the market need and money. As people look to scale their idea having an entrepreneurial mindset and leadership qualities prove important. In this digital age, someone who knows how to use social media as a marketing platform will have an edge over those who don't.

Reasons for entrepreneurship

#20 - In 35 of the 50 economies in one report, over half of adults reported starting a new business to earn a living due to job scarcity1 

#21 - In the US, 26% of entrepreneurs said they wanted to be their own boss2 

Flexible work schedule increased and focused productivity are some benefits of being your own boss. Entrepreneur statistics showed that 26% of Americans were motivated to start a business because of a desire to be their own boss. The second-highest motivation is passion at 23%, followed by opportunity, which accounts for 19%. The least motivations for starting a business are life events at 3%, reluctance to retire, and job loss, making up 6% each.

Apart from money, marketing, and business knowledge, motivation can contribute to the success or downturn of a venture.

Passion

#22 - 23% of entrepreneurs in the US started businesses to follow their passion2 

Passion is a powerful motivation for most entrepreneurs. It contributes to the fact that aspiring entrepreneurs do not cite high risk as a barrier as much as other reasons. Social media often makes owning a business out to be fun, glamorous, and profitable; however, entrepreneurship is not for the faint of heart. As our selection of entrepreneurship quotes shows, being passionate about your idea can help you stick with your goal when others are quitting.

In 2018, entrepreneurship statistics showed that business services, food, restaurant, beauty, health, and fitness were the top 3 small business industries. These are ventures that people go into majorly because they have talent and passion in related areas.

#23 - The desire to be self-employed motivates 37% of aspiring entrepreneurs3 

Challenges entrepreneurs face

#24 - The number one challenge faced by entrepreneurs is generating funding3 

Money matters in determining whether small businesses succeed or fail. In most situations, an entrepreneur has to raise business capital solely through individual efforts. Statistics show that 77% of companies in 2018 were funded solely by the entrepreneur. Money sourced from a family member or friend made up about 25%.

Entrepreneur statistics show that less than $5,000 capital is used to start one-third of small businesses, and 58% started with less than $25,000. About 65% of entrepreneurs in this capital bracket expressed doubts about the sufficiency of their capital. About 82% of businesses fail due to strained cash flow. No less than 29% of companies started by Americans fail due to insufficient funding to keep the business going. 

Other challenges include the absence of a support system, unmanageable risks, lack of opportunity, and lack of technical knowledge. A business owner often has to overcome all or some of these challenges to become a successful entrepreneur.  

Raising funds

#25 - As of 2019, 31% of small business owners struggled with financing their businesses3 

Data reveals that 64% of people aspiring to start a business estimated the capital they need as less $50,000 to $170,000. 29% said they needed over $170,000 to $500,000 while 7% estimated that they needed $500,000 to above $1 million.

Entrepreneurship facts show millennials show little hesitation in taking loans to finance their new businesses, unlike the older generation, especially those close to retirement. The younger generation of entrepreneurs believes that a well-structured business plan suffices to take their business from the bottom to the top financially.

However, statistics show that they deny millennials bank loans more times than Gen Xers and boomers. 

Guidant Financial advises an entrepreneur who cannot access traditional financing may consider other ways of getting money. They suggest 401(k) business financing, SBA loans, or unsecured loans.

Inspiring entrepreneurs 

#26 - In 7 economies, more than 1 in 20 adults are starting or running a new business with products or services new to their local area1 

Despite the rate of failure and stories of hardship, entrepreneurship is on the rise. Stories of successful entrepreneurs inspire many people, regardless of limitations, to consider taking the journey of entrepreneurship.

In 2019 the United States saw an 18% increase in people who wanted to become small business owners. 40% of small businesses are profitable. Also, entrepreneur statistics show that companies founded by two or more people have a higher chance of success. 

Entrepreneurship facts about future projections

#27 - Less than 1 in 10 of those starting a business in Colombia expect to add no new jobs in the next five years1 

#28 - 6 out of 10 in China and Madagascar of those starting a business in Colombia expect to add no new jobs in the next five years1 

A good idea will not work on itself. It is up to the determined entrepreneur to see it through to success. For many businesses, the entrepreneur may have to work alone due to financial constraints or the delicate stage of the company.

Some of these facts may seem dire, but they should not discourage you from your goal as an entrepreneur. Keep in mind that in life, reward often comes with risk.

#29 - More than half of those starting a new business in Saudi Arabia, the United Arab Emirates, and Qatar expects to add six or more jobs in the next five years1 

Entrepreneur statistics show that a successful founder has a 30% chance of succeeding at his or her next venture. However, failure in one business does not doom a person as an entrepreneur. Entrepreneurship stats show that a founder who failed in a previous company has a 20% chance of success. This is 2% higher than the chances for a first-time entrepreneur.

1 Global Entrepreneurship Monitor, GEM, 2020. 2019/2020 Global Report
2 Guidant Financial 2021 Small Business Trends
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