30 Entrepreneur Statistics for 2021

Updated on August 17, 2021

Overview: Entrepreneur Statistics for 2021

  1. There are 582 million entrepreneurs in the world.
  2. There were 33.7 million small businesses in the United States in 2020.
  3. Small businesses employ 60.6 million people.
  4. Over 79% of small businesses in the U.S. have no other employees besides the founder.
  5. 62% of American billionaires are self-made.
  6. 62% of adults worldwide think entrepreneurship is a good career.
  7. 58% of entrepreneurs report working odd hours.
  8. 33% of entrepreneurs have only a high school diploma.
  9. 26% of entrepreneurs say their biggest motivation for starting their own business was the idea of being their own boss.
  10. 3% of entrepreneurs launched their businesses because of a life-changing event.
  11. 26.4% of Black Americans identify as entrepreneurs.
  12. 11% of entrepreneurs work in the gig economy.
  13. 60% of people who start small businesses are in the age range of 40 – 60.
  14. Entrepreneurs who own a home are 10% more likely to start a business than those who don’t.
  15. 87% of entrepreneurs plan to create jobs for others.
  16. The United States’ Global Entrepreneurship Index is 83.6.
  17. 27 million working-age Americans are starting or running a business.
  18. The United States’ rate of early-stage entrepreneurship is 15.6%.
  19. 45.5% of Americans think starting a business is easy.
  20. About half a million startups are launched in the United States every year.
  21. The average amount of capital needed to start a business is $10,000.
  22. 35% of small businesses use an LLC structure.
  23. 67% of entrepreneurs use personal funds to solve financial problems with their business.
  24. 59% of entrepreneurs who apply for a loan use it to expand their business.
  25. 20% of small businesses fail in their first year.
  26. 42% of small businesses fail because there is no need for their product.
  27. 74% of small businesses say healthcare costs are the top challenge for their business.
  28. 30% of small business owners don’t pay themselves.
  29. 92% of entrepreneurs don’t regret starting their business.
  30. The startup failure rate has decreased by 33% since 1977.

Starting a business is no small task, yet there are millions of entrepreneurs around the world. This year, due to the COVID-19 pandemic, entrepreneurship took a hit, but entrepreneurs tend to be resilient people. 82 percent of small businesses have made workplace changes due to the COVID-19 pandemic, but the future for entrepreneurship is still bright. [1]

Anyone can start a business — that’s the beauty of entrepreneurship — but growing it is difficult, especially in tough economic times. Educating yourself on entrepreneurship is a great place to start, however.

Here, we’ll outline the most important statistics and trends that describe entrepreneurship today, both in the United States and the world.

General Entrepreneurship Trends

1. There are 582 million entrepreneurs in the world.

Entrepreneurship is a worldwide endeavor and offers opportunities to self-motivated people everywhere. [2]

2. There were 33.7 million small businesses in the United States in 2020.

The Small Business Administration reports that there are nearly 34 million small businesses in the United States. That accounts for 99.9% of all businesses, and they’re all started by entrepreneurs. [3]

3. Small businesses employ 60.6 million people in the United States.

All of these small businesses put more than 60 million people to work. Yes, you did the math right — the average small business has just two employees. [3]

4. Over 79% of small businesses in the U.S. have no other employees besides the founder.

In fact, nearly 80% of small businesses comprise only the founder. Solopreneurship isn’t new, but it has gained popularity in recent years. [4]

5. 62% of American billionaires are self-made.

Entrepreneurship has a solid record in the United States. According to Wealth-X research, there are 585 billionaires in the United States and 62% of them got there on their own. Only 20% of billionaires achieved this status through inheritance while 18% experienced a combination of both.[5]

6. 62% of adults worldwide think entrepreneurship is a good career.

The number of successful entrepreneurs in the world have contributed to a general feeling that entrepreneurship is a good career. There is obvious risk, but the reward is enticing to many. [6]

7. 58% of entrepreneurs report working odd hours.

Because entrepreneurs work for themselves, they often set their own hours. For many, that means working when they want, which leads to strange working hours and, sometimes, long working hours. [7]

Who Are Entrepreneurs?

8. 33% of entrepreneurs have a high school diploma or less.

The highest level of education that one-third of entrepreneurs have reached is graduation. You don’t need to graduate college to have a great idea or run a successful business. [8]

9. 26% of entrepreneurs say their biggest motivation for starting their own business was the idea of being their own boss.

Who doesn’t want to be their own boss? For 26% of entrepreneurs, being in charge is the primary motivation for starting a business. [8]

10. 3% of entrepreneurs launched their business because of a life-changing event.

This is an interesting statistic that may change as a result of COVID-19. Just 3% of entrepreneurs claim a life-changing event like losing a job or a family tragedy drove them to entrepreneurship. With many people furloughed or laid off during the pandemic, this number may rise in time. [8]

11. 26.4% of Black Americans identify as entrepreneurs.

Black Americans are the fastest growing demographic of entrepreneurs in the country. More than one-quarter of Black Americans are entrepreneurs already and many more are finding opportunities in entrepreneurship. [9]

12. 11% of entrepreneurs work in the gig economy.

The gig economy is growing, and more and more people are getting involved. However, not everyone is just a gig worker. Many entrepreneurs have built entire businesses dedicated to working in the gig economy. [10]

13. 60% of people who start small businesses are in the age range of 40 – 60.

The majority of new entrepreneurs are well into their working lives. When you’ve worked for some time, you likely have more startup capital than someone fresh out of college, you have experience in the field you’re entering, and you may have more financial security as well. [8]

14. Entrepreneurs who own a home are 10% more likely to start a business than those who don’t.

Another surprising trend in entrepreneurship? Homeowners are more likely to start businesses. Again, financial and personal security make starting a business easier. [11]

15. 87% of entrepreneurs plan to create jobs for others.

What isn’t so surprising is that most entrepreneurs want and plan to create jobs for others. After all, in order to grow, you’ll need more employees. [10]

Entrepreneurship in America

16. The United States’ Global Entrepreneurship Index is 83.6.

The Global Entrepreneurship and Development Institute (GEDI) ranks developed countries annually on their entrepreneurial attitudes, abilities, and aspirations and the infrastructure that enables entrepreneurs to thrive. The United States ranks number one in the world, just ahead of Switzerland and Canada. [12]

17. 27 million working-age Americans are starting or running a business.

This number represents 16% of the American workforce. That’s a significant chunk of workers who are so self-motivated to build their own businesses from the ground up. [13]

18. The United States’ rate of early-stage entrepreneurship is 15.6%.

In fact, America’s official early-stage entrepreneurship rate ranks first in the world. [10]

19. 45.5% of Americans think starting a business is easy.

With so many Americans starting businesses, it’s no surprise that nearly half of Americans consider it easy. Yes, the United States is the global leader in entrepreneurship, and at least part of that is a prevailing attitude that anyone can do it. [10]

20. About half a million startups are launched in the United States every year.

That entrepreneurial attitude is put to good use every year, as nearly half a million startups are launched in the U.S. every single year. [14]

Entrepreneurship Financing

21. The average amount of capital needed to start a business is $10,000.

Some businesses are relatively easy and inexpensive to start. Others require much more investment. Nationally, the SBA reports that the average entrepreneur requires $10,000 to start a business. [15]

22. 35% of small businesses use an LLC structure.

More than one-third of small businesses structure themselves as an LLC. 33 percent are S-Corporations, 19% are C-Corporations, 12% are sole proprietorships, and 4% are partnerships. [16]

23. 67% of entrepreneurs use personal funds to solve financial problems with their business.

Entrepreneurship requires significant personal investment. Two-thirds of entrepreneurs rely on their personal funds to solve financial issues rather than take out a loan or seek investment. [17]

24. 59% of entrepreneurs who apply for a loan use it to expand their business.

However, of those entrepreneurs who do apply for a loan, most use that money to expand their business rather than find startup capital or pay debts. [18]

The Success of Entrepreneurship

25. 20% of small businesses fail in their first year.

Contrary to popular belief, small businesses don’t fail nearly as frequently as you may think. Only 20% of businesses fail in the first year, 30% fail within two years, and 50% close within five years. That’s a lot of failure, but it’s not to say that those businesses didn’t turn a profit or end on the entrepreneur’s terms. [19]

26. 42% of small businesses fail because there is no need for their product.

Why do businesses fail? For nearly half of them, it’s because there simply isn’t a market for their product or service. You can’t succeed if you don’t understand your market! For 29% of businesses, running out of cash leads to failure, while 23% simply don’t hire the right people. [20]

27. 74% of small businesses say healthcare costs are the top challenge for their business.

Employees help your business grow, but they also come with significant expenses. For many American small businesses, exorbitant healthcare costs present an enormous challenge. Indeed, many businesses say paying for employee healthcare is their biggest challenge. [21]

28. 30% of small business owners don’t pay themselves.

Many small businesses live with extremely slim profit margins. Nearly one-third of American small business owners don’t pay themselves a salary, rather living off the profits of their business. 86.3 percent pay themselves less than $100,000/year. [22]

29. 92% of entrepreneurs don’t regret starting their business.

While you may not make money right away as an entrepreneur, most entrepreneurs don’t regret starting their business. There are many benefits to entrepreneurship — from setting your own schedule to being your own boss — that money isn’t the most important thing for everyone. [22]

30. The startup failure rate has decreased by 33% since 1977.

The future is still bright for entrepreneurs. Since 1977, the startup failure rate has steadily decreased and — COVID-19 notwithstanding — appears like it is set to continue declining into the future. [23]

The Bottom Line

Entrepreneurship is risky, but the United States remains the best country in the world for entrepreneurs. Regardless of your interest or expertise, you can start a business in the U.S. and have a decent chance of seeing success. Despite the COVID-19’s impact on small business in the U.S., there is still considerable hope for entrepreneurs in 2021 and beyond.

References

  1. https://nsba.biz/wp-content/uploads/2020/07/COVID-19-Path-Forward-Survey-July-2020-1.pdf
  2. https://thehill.com/blogs/pundits-blog/economy-budget/323586-the-worlds-582-million-entrepreneurs-are-not-created-equal
  3. https://cdn.advocacy.sba.gov/wp-content/uploads/2020/06/04144224/2020-Small-Business-Economic-Profile-US.pdf
  4. https://www.nase.org/sf-docs/default-source/research-results/self-employed-and-the-u-s-economy–aug2012.pdf?sfvrsn=2%22
  5. https://www.wealthx.com/about-us/press-news/2016/62-percent-of-american-billionaires-are-self-made/
  6. https://www.prnewswire.com/news-releases/two-thirds-of-adults-worldwide-think-entrepreneurship-is-a-good-career-choice-300216021.html
  7. https://www.freshbooks.com/press/annualreport
  8. https://www.guidantfinancial.com/2018-small-business-trends/
  9. https://entrepreneurship.babson.edu/gem-data-black-entrepreneurship-us/
  10. https://www.babson.edu/media/babson/assets/blank-center/GEM_USA_2018-2019.pdf?_ga=2.134293681.1703674044.1598997454-1164342174.1598997454
  11. https://learn.g2.com/small-business-statistics
  12. https://thegedi.org/global-entrepreneurship-and-development-index/
  13. https://www.babson.edu/academics/centers-and-institutes/the-arthur-m-blank-center-for-entrepreneurship/thought-leadership/global-entrepreneurship-monitor/
  14. https://startup.unitelvoice.com/entrepreneur-statistics
  15. https://www.sba.gov/sites/default/files/2014_Finance_FAQ.pdf
  16. https://nsba.biz/wp-content/uploads/2018/02/Year-End-Economic-Report-2017.pdf
  17. https://www.fedsmallbusiness.org/medialibrary/fedsmallbusiness/files/2019/sbcs-employer-firms-report.pdf
  18. https://www.federalreserve.gov/publications/2017-september-availability-of-credit-to-small-businesses.htm
  19. https://www.bls.gov/bdm/us_age_naics_00_table7.txt
  20. https://fortune.com/2014/09/25/why-startups-fail-according-to-their-founders/
  21. https://irp-cdn.multiscreensite.com/45d2c930/files/uploaded/PPS-Small-Business-Health-Care-Poll-2019%20%281%29.pdf
  22. https://www.fundera.com/blog/study-finds-business-owners-earn-less#:~:text=Additionally%2C%20more%20than%2070%25%20of,38.6%20hours%20worked%20per%20week
  23. https://www.entrepreneur.com/article/254871