Entrepreneurship

Entrepreneurship has long been considered risky, although that perception is slowly changing, thanks to the number of successful online businesses. Still, it takes considerable money, time, and effort to open a business and to keep it going long enough to start seeing profits. Success also depends on trends, customer demand, political climate, competition, the economy, and other unpredictable social factors. The longer a company remains in business, the more likely it is to succeed. However, companies can still go out of business up to 15 years after launching.

According to Small Business Administration (SBA) data, from 1994 through 2021, nearly 68 percent of new businesses survived at least two years; 49.2 percent survived five years; nearly 34 percent survived 10 years; and nearly 26 percent survived 15 years. The SBA report also noted that of the businesses that reach the five-year mark, more than two-thirds of them continue operating for 10 years. The survival rate of businesses increases the longer they continue operating: more than 76 percent of the businesses that are open after 10 years reach the 15-year mark.

The coronavirus pandemic had a major impact on entrepreneurship in 2020 and 2021. Some entrepreneurs were able to adapt their businesses and retain or grow their customer base through the lockdowns and remote work. Many others struggled and are either barely hanging on or have gone out of business. In the first half of 2020 (early in the pandemic), there was a loss of 15 million jobs, of which 9.1 million were jobs in small business. Small businesses started to recover quickly, however, adding 1.6 million jobs by the third quarter of 2022. And despite the setbacks during the pandemic, the SBA reported that the number of small employer firms has increased each year since 2011. Overall, small businesses created 20.2 million net new jobs from January 1995 to June 2023, while large businesses created 12.8 million new jobs in that same time frame. As described in a Forbes article, "the continued contribution of small businesses to job creation remains a vital aspect of economic growth and resilience."

In spite of the risks associated with starting a business, entrepreneurship continues to be strong. It is part of the American identity—the United States is viewed worldwide as a land of opportunity. People have increasingly turned to starting a small business as an alternative for employment while the job market remains highly challenging. There are no educational, racial, or gender barriers to starting a new business, so there are opportunities for people of all backgrounds. The SBA reported that there were 1.2 million minority-owned employer firms, 1.3 million women-owned firms, and 304,823 veteran-owned firms in the United States.

The trend in home-based businesses is growing rapidly. The trend was started initially by women who wanted to stay home to care for their children but either didn't want to give up their jobs or needed the income. Now more than half of the people working from home are men. Other factors that have contributed to the increase of at-home businesses include downsizing during hard economic times, the growth of the Internet and computer technology, and the growth of the service sector of the economy. Many college students are financing their educations through working at home as freelance workers or independent contractors. This sector of entrepreneurs is expected to continue to grow. The freelance population is expected to account for a large percentage of all workers in the next few years. Upwork and the Freelancers Union predict that by 2027, nearly half of all occupations will consist of freelance workers.

Other students are financing their educations by launching their own e-business. E-commerce is thriving and has continued to generate interest and business. According to a report by the research group Statista, in 2023, e-commerce revenue in the United States had climbed to $275 million, an increase from $142 million in 2019, and strong growth is predicted through 2029. The entrepreneurial spirit in America is accepted and well respected. There is honor and pride associated with starting a business from scratch and working hard to make it succeed. Anyone can start a business, whether motivated by a love for making raspberry jam, the familiarity of carrying on the family printing business, the invention of a new dot-com niche, or the ability to anticipate the next craze in electronic gadgets. The opportunities are endless for entrepreneurs who are willing to accept the risks, or blindly ignore them.