As 2019 came to a close, entrepreneurs and small business owners held a strong sense of optimism.

In fact, 82% of small business owners surveyed in the Bank of America Small Business Owner Snapshot expected to end 2019 bringing in more revenue than the year before. When picturing the year ahead, 69% of respondents said they expected to expand their businesses, and 59% expected increased revenue for 2020.

While those ambitions may have been realized for some, the events of 2020 have presented unique challenges for small business owners. Though the future of entrepreneurship feels uncertain, there are also remarkable opportunities to continue evolving the way business owners create, buy, and sell products.

Here are some key statistics to know about the state of entrepreneurship in 2020.

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Stats About Entrepreneurship

Entrepreneurship Landscape

1. Entrepreneurship rates have been trending upwards in the United States for the past 19 years.

2. In 2020, there were 33.7 million small businesses in the United States, accounting for 99.9% of businesses.

3. Small businesses in the U.S. employ 60.6 million people.

4. 70% of small business owners report working more than 40 hours per week, with 19% working more than 60 hours per week.

5. 78% of entrepreneurs say working for themselves has improved their money management skills.

6. Over 79% of small businesses in the U.S. are self-employed and have no other employees besides the founder.

7. The U.S. has the highest rate of early-stage entrepreneurship in the developed world at 15.6%.

8. 45.5% of Americans think starting a business is easy.

9. 87% of early-stage entrepreneurs plan to create jobs for others.

10. 39% of working-age adults in the U.S. know an entrepreneur personally.

11. One in 12 small businesses closes each year. The top reason small businesses in the U.S. close is because of low sales or cash flow.

12. 74% of companies actively invest in social media marketing.

13. 63% of companies are planning to invest in website upgrades in 2020.

14. Nearly 64% of companies actively invest time in SEO.

15. 74% of small business owners say healthcare costs is the top challenge for their business.

16. Retail and business services are the most popular industries for small business owners, with 13% of small businesses falling into these categories.

17. 78% of small business owners say their businesses are profitable.

18. Nearly 543,000 new businesses are created in the U.S. each month.

19. One-quarter of entrepreneurs report having a hard time finding qualified employees.

20. 70% of small businesses offer products and services online.

21. 67% of small business owners use social media for business networking.

22. 82% of small business owners say attracting new customers is a bigger challenge than retaining current customers.

23. The most common small business structure is an LLC (35%), followed by S-Corp (33%)
Corporations (19%), sole proprietorships (12%) and partnerships (4%).

24. 35% of employees working at firms with 50 or fewer employees say they will likely pursue self-employment. 25% of people who work for larger companies are interested in pursuing entrepreneurship.

Financial Statistics

25. 40% of crowdfunding campaigns are raising funds for business and entrepreneurship ventures.

26. 86.3% of small business owners have a salary lower than $100,000, with 30% not paying themselves a salary at all.

27. Investment funding has decreased by 16% from 2019 to 2020.

28. In 2018, the median salary for self-employed individuals was $51,816.

29. Small businesses in Massachusetts report losing at least 25% of their revenue in 2020 due to the COVID-19 pandemic.

30. The biggest challenge for small business owners and aspiring entrepreneurs is the lack of capital.

31. The average amount of startup capital needed by a small business owner is $10,000.

32. In 2019, the annual self-employment or small business revenue was $143,000.

33. 37% of small business owners rely on cash to fund their businesses.

34. The second most common form of business funding is from 401K funding, which is most popular among 13% of small business owners.

35. The average CEO makes an annual salary of $156,128.

36. 80% of small business owners who participated in the National Small Business Association Small Biz Survey applied for federal lending programs in 2020.

Entrepreneur Demographics

37. Over 54% of entrepreneurs in the U.S. have a bachelor’s degree or higher.

38. 5.2 million small business owners in the U.S. identify as people of color.

39. 26.4% of Black Americans identify as entrepreneurs, the fastest-growing demographic of entrepreneurs in the U.S.

40. 39% of entrepreneurs in the U.S. are between the ages of 35-44.

41. 30% of businesses founded by women are in the wholesale and retail industries, and 20% are in the areas of health, government, education, and social services.

42. In the U.S., 12.3 million businesses are owned by women with 47.8% of these businesses owned by women of color.

43. 29.3% of businesses in the U.S. are owned by people of color.

44. 2.52 million, or 9.1% of businesses in the U.S. are majority-owned by veterans.

45. 92% of entrepreneurs don’t regret launching their businesses.

46. 30% of entrepreneurs are serial entrepreneurs who have founded or run more than one business.

47. Half of the adults surveyed chose to start a business due to having a hard time finding well-paying jobs.

How Entrepreneurs Work

48. 40% of entrepreneurs start their business to make a difference in the world.

49. 11% of entrepreneurs work in the gig economy.

50. One-third of American entrepreneurs launch their businesses with family.

51. Half of the small businesses in the U.S. are home-based.

52. One-third of small business owners are very confident they will recover from the COVID-19 pandemic and economic downturn.

53. 82% of small businesses have made workplace changes in response to the COVID-19 pandemic.

54. 84% of entrepreneurs chose to work independently in an area they had previous experience in.

55. 59% of entrepreneurs would work past the age of 65 because they want to, not out of necessity.

56. 34% of small business owners are focused on growing annual revenue while maintaining headcount.

57. According to Freshbooks, the top skills needed for entrepreneurship are communication, problem-solving, and time management.

58. 58% of entrepreneurs report working odd or irregular hours.

59. Desire to control one’s career is one of the biggest motivators for self-employment. 65% of self-employed individuals say having the freedom to choose when they work is the biggest indicator of having control over their careers.

60. 45% of entrepreneurs use their mobile devices to stay connected to and perform tasks for work.

We’ll continue sharing relevant data on the state of entrepreneurship as new research continues to emerge. To learn more about small business ownership check out The Ultimate Guide to Entrepreneurship.

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Originally published Sep 10, 2020 8:30:00 AM, updated February 04 2021