According to the Global Entrepreneurship Monitor, there are 31 million entrepreneurs in the USA, which is 16% of our workforce. These small businesses employ 61.7 million people. In May of this year, 423,945 new business applications were filed. Keep in mind that only 65% of small businesses in the USA are profitable.

4% of entrepreneurs have a doctorate degree, 27% have master’s degrees, 44% have a bachelor’s degree, 11% have an associate’s degree and 15% have a high school diploma/GED. The top 5 industries for entrepreneurs are retail-storefront and e-commerce, food and restaurant, health beauty and fitness services, residential and commercial services, and construction and contracting.

20% of new businesses fail during the first two years of being open, 45% fail during the first five years and 65% fail during the first 10 years according to the U.S. Bureau of Labor Statistics. Only 25% of new businesses make it to 15 years or more. These statistics have been consistent since the 1990s. Why do so many entrepreneurs fail?

1. Your idea does not actually satisfy a need. You think you have the greatest idea since sliced bread, but you did not research what your market actually needs. You must find an opening or unmet need within a market and then fill it rather than trying to push your product or service into this market. It is much easier to satisfy a need rather than create one and convince people they should spend Money with you.
2. You don’t have enough capital to last six months. In planning a new business, you must assume you won’t get your first sale for six months. So, you need to have enough funding set aside to make it to your first sales cycle.
3. Your ego gets in the way. Most entrepreneurs believe they are the smartest person in the room. But the smart entrepreneurs must admit they are not experts in every business discipline. So, if you don’t like accounting, find a CFO who is passionate about numbers. If you can’t program and design a website, find an engaged programmer and marketer. Entrepreneurs must be able to communicate with others and build a team as enthusiastic as they are. 23% of businesses fail because of poor communication between employees and poor teamwork.
4. Poor location and lack of a meaningful Internet presence will sink your business. If you rely on foot traffic, a bad location is self-explanatory. But as dangerous in today’s electronic world, is a poor Internet presence and a lack of social media impact. You need to make sure you’re marketing not only reaches people, but it reaches the right audience for your product or service.

Knowing that only 25% of businesses survive, what is driving the American entrepreneur to keep trying? Some are visionaries who dream big, and can see far into the future and can imagine how things could be different. Some are problem solvers who not only want to create a product, but they are filling a gap, a pain point or an inefficiency. Some want to be the social change agent who has a positive impact on society. Others just want to be their own bosses seeking freedom and autonomy. While some want to create a Legacy with a lasting impact that stands the test of time, whether it is a brand, a family business or just leaving a mark on their industry; with the desire to be remembered and create something bigger than themselves.

It does look like the entrepreneurial torch is finally being passed down from the Baby Boomer Generation according to Guidant. Baby Boomers, who have long been considered the backbone of entrepreneurship, experienced a 7% drop in representation since last year. Millennials experienced a 27% increase since 2023 showing their growing influence creating businesses through the Internet which now makes this generation 16% of entrepreneurs. Generation X now has the most entrepreneurs with 47% and Boomers fall to 37%.

Passion is the entrepreneur’s fuel. It sustains them through tough times and is rooted in a deep-seated desire to solve problems and make a difference. This emotional investment is why entrepreneurs repeatedly face risks and failures without giving up. Entrepreneurship inherently involves risk. Successful entrepreneurs are those who not only understand and manage this risk but also learn to embrace failure as a step toward success. Their risk tolerance allows them to see beyond temporary setbacks. America has been an entrepreneurial country since its inception. With the advent of the Internet, electronic communications, and the ability to reach the world from your home office, the newest generation of entrepreneurs may be on the cusp of being the most successful group in our history.  I truly do hope this will happen.

Originally Published on https://www.bizcatalyst360.com/author/marcjoseph/

Marc Joseph Professional Author