10 Entrepreneur Statistics That You Need To Know in 2020 [INFOGRAPHIC]
Thinking about making the leap into entrepreneurship?
It’s a thrilling new experience, one that’s extremely rewarding and sure to keep you on your toes at all times.
We’re not gonna lie: frustration is a natural part of entrepreneurship. But once you achieve success, you’ll realize it was all worth it.
Before you start, whether you want to just test the waters with a little side hustle or go full-on into it, it’d do you best to get a feel of entrepreneurship around the world.
That’s what we’re here to do today. We’ll cover issues like:
- Why are the joys being an entrepreneur brings?
- How many entrepreneurs are there in the world?
If you’re looking for entrepreneurship stats and facts about entrepreneurs, read on. In this article, we’ll cover ten entrepreneur statistics you need to know in 2020. Let’s get straight to them.
- 1. How Many Entrepreneurs Are There in the World?
- 2. How Many New Entrepreneurs Are There in the US?
- 3. How Many Female Entrepreneurs Are There Worldwide?
- 4. What Percentage of Entrepreneurs Are Turning a Profit?
- 5. Black Entrepreneurs Statistics
- 6. Minority Entrepreneurs
- 7. Entrepreneurship Stats: Motivation To Start
- 8. Percentage of Entrepreneurs in America
- 9. How Many Millionaires Are Self-Made?
- 10. Family-Based Entrepreneurship
- Summary: Entrepreneur Statistics
- Want to Learn More?
1. How Many Entrepreneurs Are There in the World?
To kick things off, let’s first understand how popular being an entrepreneur is.
There are 582 million entrepreneurs in the world (MARKINBLOG, 2020). Though they are spread across the globe, there are a few places that entrepreneurs—both existing and aspiring ones—gravitate towards. This is mostly because of the good support and infrastructure that these places provide.
The World Bank’s Ease of Doing Business index ranks economies according to how conducive they are for new businesses.Of the 189 countries and territories analyzed in its 2019 report, New Zealand came out on top. This is followed by Singapore, Hong Kong, Denmark, and South Korea.
The United States is sixth on the list and ranks particularly high in terms of ease of resolving insolvency (second) and obtaining credit (fourth).
2. How Many New Entrepreneurs Are There in the US?
Given how easy it is to start a new business in the US, it should come as no surprise that there are hundreds and thousands of entrepreneurs launching new ventures there every single year.
According to the latest entrepreneurship stats, at the end of the first quarter in 2019, there were 774,725 businesses in the US that were less than one year old (Statista, 2019).
Not only is this a 5.6 percent year-over-year increase, but it is also the highest number of young establishments there’s ever been in a single calendar year in 25 years.
In 2010, after the global financial crisis, new businesses fell to 560,588—its lowest point in 15 years. But since then, entrepreneurship has been on a steady increase. With the exception of a slight dip in 2013, more and more new businesses have been launched every single year since then.
3. How Many Female Entrepreneurs Are There Worldwide?
Now that we’ve established the total number of entrepreneurs in the world and in the US, let’s look at things from another angle—the number of female entrepreneurs worldwide.
As of 2019, there were approximately 252 million women worldwide engaged in entrepreneurial activities (GEM Consortium, 2019).
Contrary to what some may think, regions with the highest rates of female entrepreneurship aren’t in the more developed countries. They’re actually located in sub-Saharan Africa, where more than one in five (21.8 percent) of women are business owners. This is followed by Latin America with 17.3 percent.
On the other end of the spectrum lie countries in the MENA (Middle East and North Africa) region with nine percent and Europe with just six percent.
Of the 252 million female entrepreneurs worldwide, more than one-third (36.4 percent) operate as solopreneurs, which is proportionally higher than the 26.9 percent of men who do so. Only 2.5 percent (around 6.3 million) of these businesswomen hire more than 20 employees.
4. What Percentage of Entrepreneurs Are Turning a Profit?
Being an entrepreneur and setting up a business is one thing. Sustaining it and making sure your numbers don’t fall in the red, however, is another.
The latest entrepreneurial statistics show that more than three out of every four (78 percent) small businesses are currently profitable (Guidant Financial, 2020).
But not all businesses are made equal and chances of turning a profit vary greatly from one type of business to another. There are some, like medical or dental clinics, that have much higher starting costs than others, such as an ecommerce business.
The sector your entrepreneurial venture is in can also affect your gains. Recent figures show that the industry with the highest net profit margin is accounting, with a margin of 18.4 percent (of total revenue). This is followed by lessors of real estate at 17.9 percent and legal services at 17.4 percent.
5. Black Entrepreneurs Statistics
What about minority entrepreneurs? More specifically, African American entrepreneurs? How are they performing?
According to Guidant Financial, a US firm that finances small businesses, the majority of black entrepreneurs there (20 percent) provide business services. This is followed by health, beauty, and fitness services, food and restaurant, retail, and construction and contracting services.
Cash flow, one of the most common problems in business, is the top challenge African American entrepreneurs are currently facing. Marketing and advertising and inadequate time management are also some of their main concerns.
With regards to their financial health, the proportion of businesses owned by African Americans that are profitable is slightly lower than the national figure—72 percent instead of 78 percent (Guidant Financial, 2020).
6. Minority Entrepreneurs
Entrepreneurship has become increasingly popular in the US over the past few years. But how many of these businesses, both new and existing, are minority-owned?
The latest entrepreneurial statistics show that in the past decade, as many as two million new businesses were launched in the United States. Of them, minority-owned companies make up more than half (SBC, 2020).
Overall, figures show that there are up to four million firms in the US that are owned by minorities and they generate a whopping $700 billion in sales every year.
Having increased by 35 percent over the past ten years, the number of minority entrepreneurs is clearly on the rise. But as of now, there still exists a disparity. Nearly one-third (32 percent) of the US population is a minority, while the percentage of minority-owned businesses stands at a much lower figure: 18 percent.
7. Entrepreneurship Stats: Motivation To Start
So what’s so great about being an entrepreneur? What are some factors that propel business owners to embark on such a venture?
As it turns out, being the boss of yourself and not having to be accountable to anyone are the main drivers of entrepreneurship in the US.
More than half (55 percent) of US small-business owners cite this as their main reason to start a business. This is followed by 39 percent who say they want to pursue their own passion.
The third most popular motivation to start a business is a “dissatisfaction with corporate America.” In fact, 25 percent of the current US entrepreneurs say they were driven to entrepreneurship because of this.
It’s interesting to note that this sentiment has become more widespread this year. From 2019 to 2020, there was a 27 percent increase in people who have started their own business as a result of this discontent (Guidant Financial, 2020).
8. Percentage of Entrepreneurs in America
The advantages of entrepreneurship are clear. You get to be your own boss and you can choose when you want to work.
So, how many people in the US are choosing to be entrepreneurs over being an employee? Recent entrepreneur stats show that, in 2018, 15.6 percent of the US adult population (aged from 18 to 64) were entrepreneurs (Entrepreneurship.babson.edu, 2019). This was an all-time high and approximately 15 percent more than the previous year’s figures.
This peak also happened to coincide with a period of falling unemployment rates in the US. According to analyses, of the adult entrepreneurs, eight percent started a business “out of necessity.” The others did so out of interest and passion.
The proportion of entrepreneurs varies across different racial groups. More than one in four (26.4 percent) of adult entrepreneurs identify as Black/African American, while nearly half of that (13.5 percent) identify as White/Caucasian.
9. How Many Millionaires Are Self-Made?
Will being an entrepreneur set you on a path to earning millions?
While that’s never a guarantee, here’s an entrepreneurship stat that may interest you if that’s something you’re going for: the majority of the world’s richest people are “self-made” (CNBC, 2019).
According to an analysis of wealthy individuals worth at least $30 million, of which there were 265,490 in the world in 2018, 67.7 percent of them accrued their wealth on their own. A quarter (23.7 percent) of them depended on themselves and their inheritance, and just 8.5 percent of them inherited all their wealth.
The percentage of these self-made millionaires has also been increasing year after year. In 2016, they made up 66.4 percent of all high net worth individuals. A year later, the number rose to 67.4 percent before further inching to 67.7 percent.
10. Family-Based Entrepreneurship
There are certainly advantages to starting a business with a partner.
After all, two heads are better than one. Plus, who better to embark on an entrepreneurial journey with than family?
According to the latest entrepreneurial statistics, nearly one in five (18.7 percent) business owners around the world are in it together with a family member (GEM Consortium, 2019).
Such an arrangement is particularly popular in countries like Colombia, the United Arab Emirates, and Uruguay, where family-based entrepreneurship makes up more than one-third of all the businesses there.
Experts say that in these regions, particularly Latin America, family plays a vital role in kick-starting the venture. However, there may be cases where some of these businesses fail to progress with its original founding members. Conversely, some family members may not be involved in the starting stage and only come on board after.
There you have it—the top ten entrepreneur statistics you need to know in 2020.
Was there any stat that you found particularly surprising? And what did you make of these entrepreneurial statistics?
Whether you’re looking to become an entrepreneur in the US or anywhere else in the world, these facts about entrepreneurs should have given you a better idea of the exciting new world you’ll soon be joining.
Summary: Entrepreneur Statistics
Here’s a summary of the Entrepreneur statistics you need to know in 2020:
- There are 582 million entrepreneurs in the world (MARKINBLOG, 2020).
- There were 774,725 new businesses (established less than one year prior) in the US at the end of Q1 2019 (Statista, 2019).
- As of 2019, there were 252 million female entrepreneurs worldwide (GEM Consortium, 2019).
- More than three in four (78 percent) of US small businesses are currently profitable (Guidant Financial, 2020).
- 72 percent of US businesses owned by African Americans are profitable (Guidant Financial, 2020).
- More than half of the new businesses started in the US over the past decade are minority-owned (SBC, 2020).
- The number of people wanting to start their own business because of their dissatisfaction with corporate America grew 27 percent this year (Guidant Financial, 2020).
- In 2018, 15.6 percent of all US adults were entrepreneurs (Entrepreneurship.babson.edu, 2019).
- 67.7 percent of the world’s wealthiest individuals (with a net worth of at least $30 million) are self-made (CNBC, 2019).
- Nearly one in five (18.7 percent) of businesses worldwide takes on the form of family entrepreneurship in one way or another (GEM Consortium, 2019).
Want to Learn More?
- Design your dream life [Course]
- 10 Characteristics of an Entrepreneur Who Succeeds
- Aspiring Entrepreneurs: Read This if You Feel Like You’re Not Good Enough
- What Sort of Background Do You Need To Be a Successful Entrepreneur?
Is there anything else you’d like to know about Entrepreneur statistics and wish was included in this article? Let us know in the comments below!