This is the decade of the entrepreneur. Americans are
recognizing the benefits of self-employment and small-business
ownership that an increasing number of people are choosing to
start their own businesses.
Research shows that self-employment is among the
fastest-growing segments of American business. Many look to
entrepreneurship as a means of achieving professional freedom and
creativity; others seek financial rewards; others want more time
for their families; and still others simply want more control over
their career path. Regardless of the reason, an increasing number
of Americans, both young and old, are opting to start up their own
businesses rather than join the ranks of corporate America.
But who are America's self-employed?
We looked at the Bureau of Census' Consumer Population Survey
to identify the common characteristics of America's entrepreneurs.
Through cross-tabulations and simulations focusing on the universe
of the self-employed, we found several interesting qualities of
the men and women who venture on their own.
- Our results show that the self-employed are typically married,
representing about 73.8 percent of the total sample. A little more
than a tenth (12.5 percent) have never been married, while those
who are divorced constituted about 9.5 percent.
- An overwhelming majority of entrepreneurs are white, comprising
about 90 percent. Minorities comprise only a tenth of the entrepreneurs in
America. ·
- Males dominate the entrepreneurial landscape, consisting of
65.6 percent of the total number of self-employed. Women make up the remaining third or about 34.4 percent.
- Entrepreneurs typically belong to the broad age group of 25-59
years old representing about 81.9 percent of the sample. Breaking
down this wide age group, almost a third (30 percent) of the
self-employed are in their 40s. Entrepreneurs in their 30s and 50s
are almost equal in number, covering about 23.3 percent and 22.3
percent respectively. Those who are in their twenties and younger
are fairly outnumbered, capturing only 8.8 percent of the
population.
- Most of those who started their own businesses are well
educated. About 59.7 percent have received at least some college
education, and more than a tenth of this group (12.6 percent) has
graduate school and professional school degrees. A little less
than two fifths have reached high school level (37.5 percent).
- Majority of the entrepreneurs work for their business on a full
time business. About 65.6 percent dedicated their entire working
hours during the year to their businesses. Only about 13.7 percent
work for their businesses part-time.
- A significant number of the self-employed (about 70.3
percent) enjoys family income of $25,000 and higher a year. In
fact, about 28 percent has income of more than $75,000 annually.
Distinguishing between those who incorporate their enterprises
and those who do not, however, yields several interesting
demographic differences.
While men outnumber women by 1 to 3, more women operate
businesses that have not been incorporated. Of the women
entrepreneurs, 37.6 percent run businesses either as sole
proprietorship or partnerships; but only 26.6 percent incorporate
their business. More business owners of unincorporated enterprises
have also never been married (14.2 percent vis-à-vis 8.2 percent
of incorporated businesses).
As expected, owners of corporations earn more, with about 44
percent enjoying family incomes of over $75,000 per annum. About
half, or only 21.7 percent, of those with businesses that are not
incorporated enjoy this same high income.
Owners of corporations appear to be better educated than those
who operate smaller ventures. About 70.1 percent of those who
incorporated their businesses have reached college level, compared
to the 55.6 percent of those who don't incorporate.
While the statistics are fairly enlightening, one thing is
clear. Business "winners" are not just those we read
about in the business pages of newspapers, but also everyone whose
vision and drive provides them with sustained financial
independence