Despite the COVID-19 pandemic, entrepreneurship is on the rise. There’s good and bad news in recent data, both important to know for supporting your entrepreneurial endeavors. We’ve divided key entrepreneurship stats into eight overall categories to help guide your current and future entrepreneurial decisions.
1. 440,000 startups were formed in the US in June 2021
According to NPR, in June 2021, 440,000 new businesses were started, capping a record-high, 16-month period for startups in the US. The number of business starts in any economy is usually a strong economic indicator.
2. 66% of current and aspiring entrepreneurs are male; 31% are female
While this may seem like an extreme disparity, females have been reaching new heights in entrepreneurship and business starts. The 2021 figure represents solid growth from 2020, when only 27% of current and aspiring entrepreneurs were female.
3. 5.9 million entrepreneurs and business owners are under age 35
Youth aside, Generation X (ages 35-54) represents more than double the number of entrepreneurs at 12.6 million. Baby Boomers, aged 55 and over, represent a significant portion of entrepreneurs as well, at just over 11 million.
4. 20%-22% of small businesses fail within the first year
Failure rate theories and myths have discouraged entrepreneurs for years, but this myth-busting stat from Bureau of Labor Statistics data is one you can trust. On average, 30% of businesses will have failed by the end of their second year, and half will have closed their doors by the end of the fifth year. After a decade, only about a third of businesses will remain.
5. Virginia, North Carolina, and Utah are the top states for business
The rigorous criteria and methodology that go into this publication include scoring the states on the cost of doing business and state infrastructure, as well as life, health, and inclusion, which covers health care in general and the corporate push for inclusiveness.
6. There are approximately 582 million entrepreneurs on the planet
That number, from the Global Entrepreneurship Monitor, is only set to increase. Financial Times data, implies there was a 95% increase in new business applications in the US; France experienced a 20% increase in business start applications from the previous year, and Japan registered 14% more businesses than the same month in 2019.
Statistics on COVID-19’s Impact on Entrepreneurship
7. The number of businesses with employees declined by 2.4% during 2020
This understandable decline in total US business population represents a drop from a little over 8 million in 2019 to 7.82 million in 2020. The good news is that while the US economy isn’t fully recovered, business numbers have rebounded by 1.5% in 2021 to 7.93 million. Note that these figures do not include nonemployer businesses (those with no employees).
8. During the COVID-19 pandemic, the SBA dispatched $349 billion in loans to small businesses and entrepreneurs
This relief was packaged as a variety of programs under the Keeping American Workers Paid and Employed Act, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
9. Entrepreneur and proprietor annualized income has recovered to pre-COVID-19 pandemic rates nearing $2 trillion
This is an interesting development that bolsters the COVID-19 rush to entrepreneurship argument, as the Great Recession in 2008 represented a much more drawn-out decline and recovery.
Entrepreneur Sentiment Statistics
10. 29% of polled entrepreneurs credit “Ready to be My Own Boss” as the reason for starting a business
Other reasons for turning to entrepreneurship are dissatisfaction with corporate America, pursuing a passion, and being laid off.
11. The Small Business Optimism Index is at 99.7 as of July 2021
The Small Business Optimism Index is an economic data point published by the National Federation of Independent Businesses (NFIB) indicating entrepreneurs’ willingness and optimism to start and grow small businesses each month. It is based on the following components:
- Plans to Increase Employment
- Plans to Make Capital Outlays
- Plans to Increase Inventories
- Expect Economy to Improve
- Expect Real Sales Higher
- Current Inventory
- Current Job Openings
- Expected Credit Conditions
- Now a Good Time to Expand
- Earnings Trends
Minority Entrepreneurship Statistics
12. Black entrepreneurs are the largest subset of People of Color Entrepreneurs in the US
Black business owners make up 36% of entrepreneurs of color, followed by Hispanics and Asian Americans.
13. Women make up 46% of black entrepreneurs
This is a meaningful minority statistic for Black entrepreneurs and women entrepreneurs alike; this group shows one of the highest percentages of female small business owners in any segment—53% higher than white small business owners.
14. Nearly 1.8 million American businesses, or 6%, are veteran-owned
The percentage of veteran-owned businesses roughly mirrors the percent of veterans in the US adult population as a whole. Note, however, that the SBA suspects that the number of veteran-owned businesses may be inaccurately low due to “methodology issues with matching administrative records and is a work in progress for future releases.”
15. 6.3 million American business owners were born outside the US
This represents just over 20% of small business owners. The SBA approximates that one-third of these entrepreneurs are US citizens.
Rural Entrepreneurship Statistics
16. Rural communities experienced only a 0.6% employment increase from 2018–2019
This slow rate is a little less than half the urban employment increase over the same time. These communities are underrepresented in entrepreneurship and economic development in general, a reason the USDA is motivated to stimulate economic growth and business development in rural America.
17. More than 13,000 bank branches closed between 2008 and 2020
This has a disproportionate impact on rural communities. Without access to local lending and banking, rural entrepreneurs have far fewer options to fund the startup and growth of their enterprises.
Trends for Entrepreneurs to Understand: Ethical Consumerism
18. Fairtrade food sales increased 13.7% between October 2019 and 2020
This number represents one of the ethical consumerism trends brought on by COVID-19. Additionally, organic sales increased by 19% in the 12 weeks ending May 2020, and sales of meat-free and dairy-free products increased by 25% and 28% respectively in the 12 weeks ending April 2020. These changes suggest a change in consumer trends and shopping post-COVID-19 pandemic as well, as indicated by consumer surveys. This is important information for food entrepreneurs to digest.
19. 60% of consumers say they expect to buy from local shops post-pandemic
This is up from 40% shopping locally pre-pandemic. This decision may be driven by guilt, as stir-crazy shoppers trapped in their homes around the world helped ecommerce giants boost their bottom lines; Amazon, for example, has seen profit skyrocket by 220% during the last 17 months. This is a promising statistic for local entrepreneurs and small business owners.
20. 44% of people claim to have reduced their energy usage during the pandemic
Enterprises that demonstrate interest and value in ethical consumerism and social awareness are increasingly appealing to consumers. One area of consumer interest, for example, is energy usage. Working from home during the COVID-19 pandemic may have helped bring attention to the issue, with 52% of people saying they intend to lower their energy usage after the pandemic has passed.
21. 77% of customers deliberately buy from brands that share their respective values
Just as consumers have grown more grounded in ethical and socially-conscious consumption, small and large businesses alike should demonstrate they are equally rooted in social good and aware of environmental, economic, and social issues.
Trends for Entrepreneurs to Understand: Digital Dependence
22. There are 4 billion daily email users
Email marketing is enjoying a resurgence, so small business owners and savvy entrepreneurs should take note of that email number. Not only is email marketing relatively easy for business owners to facilitate, but it’s one of the cheapest, highest-return marketing methods available to businesses on a budget. Email marketing generates $36 for every $1 spent—a staggering return on investment.
23. Subscription businesses have grown more than 435% over the past nine years
Boosted by Netflix and meal subscription boxes, among other services, subscription plans have continued to enjoy an ascent. This model is straightforward, easy to market, easy to understand, and a reasonable revenue plan for many types of business. Subscription is suitable for sundry retailers, grocers, gyms, websites, music, and more.
24. Job listings for remote international employees have been growing up to 15% monthly
Tech startups have led the way in this trend, but other industries are also participating, with Canada and Mexico among the top target markets. Entrepreneurs should consider international workers as an option for their business.
25. Americans spend an average of 2.5 hours a day on social media
As frightening as that statistic on social media usage is, it’s an unavoidable indicator for entrepreneurs. Social media and multichannel marketing, including emerging platforms, content creation, and influencer marketing, are effective tools for entrepreneurs and small business owners.
Resources for Entrepreneurs
26. The USDA’s Rural Microentrepreneur Assistance Program has dispatched $68 million in loans and $17 million in grants since 2008
The USDA has stimulated rural economic development and helped decrease poverty with various similar business programs directed at socially disadvantaged groups, nonprofits, institutions of higher education, rural businesses, and federally recognized tribes. Rural entrepreneurs should be aware of these resources.
27. InBIA’s network of entrepreneurship centers has grown to 1,200 member centers in 30 countries
These centers include incubators, accelerators, hubs, and co-working spaces at Small Business Development Centers (SBDCs), nonprofits, government and economic development organizations, and universities the world over.
28. There are more than 20,000 co-working spaces worldwide
In addition to providing needed resources for entrepreneurs, co-working spaces are good for communities and economies. According to CoworkingResources, there will be more than 40,000 co-working spaces by 2024. Although this estimate was made before the COVID-19 pandemic, recent reports indicate that co-working or shared workspaces will likely “weather the storm” and perhaps even see a stronger growth trajectory going forward.
Entrepreneurship is so much more than knowing your craft—it’s knowing the environment, the customer, and the changes to both. Keeping abreast of entrepreneurship statistics, data, and trends can help any entrepreneur start and stay sharp in the rat race.