If we take a look at the broad picture, 1 in 18 people worldwide run their own business. Uganda ranks first of the most entrepreneurial countries with 28.1% of its population being self-employed, followed by Thailand (16.7%), Brazil (13.8%), Cameroon (13.7%) and Vietnam (13.3%).
Surprisingly, there are no developed countries in the top 25. The reason for this is that in developing countries, self-sufficiency and business ownership are often the only means for the population to make money and support their families. This is why people in developing countries also tend to explore more opportunities to start a venture than in developed countries. You are more aware when in need.
In contrast, Suriname (0.2%), Puerto Rico (1.3%), Italy (1.3%), Japan (1.3%) and France (1.7%) show the least amount of entrepreneurs among its population.
In general, 2 out of 3 people worldwide see entrepreneurship as a desirable career choice.
Besides, is entrepreneurship directly linked to economic power? If we take a look at the top 3 economies in the world which are America, China and Japan, and their entrepreneurialism, it is safe to say that entrepreneurship is not directly related to economic power. As the world’s biggest economy, the United States possess a low ranking of 42 out of the most entrepreneurial countries, with 4.1% of its population being self-employed. Similarly, only 3.12% of all Chinese run their own business. As for Japan, it is the 4th least entrepreneurial country, with only 1.3% of the population being entrepreneurs, as mentioned earlier.
The Typical Entrepreneur
What does the profile of a typical entrepreneur look like? The average age when starting a business is usually 40 years. Studies state that 95.1% of all entrepreneurs hold a bachelor degree still, 47% of that figure have advances in their education and acquire a masters, PhD or otherwise. The desire to start a business does not necessarily run in the family. According to some sources, 51.9% of all entrepreneurs were the first to launch a business in their family. Furthermore, less than 1% of all entrepreneurs come from extremely rich or extremely poor families.
Additionally, what type of lifestyle do they lead? The majority of entrepreneurs are already married when starting a business representing 70% of all entrepreneurs. Whereas 5.2% are divorced, separated or widowed.
As for their work experience, 3 out of 4 business owners have worked as employees at other companies for more than 6 years before launching their own startup. More so, a glimpse of hope to all struggling mothers out there; entrepreneurs are 3 times more likely to have rebelled as teenagers. Therefore, give it some time - your youngster might change the world in a few years’ time.
Moreover, launching your own business and succeeding is not an easy accomplishment. Financially speaking, with an average salary of $50,000 US dollars per year, the future does not look very bright for a fresh entrepreneur. Especially when considering that the average number of weekly working hours increases from 47 hours (average employee) to 66 (entrepreneur) in the U.S. It needs patience to achieve your goal. However, it can pay off: “Entrepreneurship is living a few years of your life like most people won’t so you can spend the rest of your life like most people can’t”
When deciding on who to partner up with when launching your startup, it is proven that two founders are more successful than one, three, four, and more. On average, they raise 3 times more money and are more likely to stay in business after 4 years.
Entrepreneurship is a spread and common topic among students. With the recent rise of entrepreneurship classes in business schools and numerous events about starting your own business, students are much more exposed to taking the next step towards their business idea. This is clear to see: 36% of all students are starting a business during their studies. These are also referred to as 'sidepreneurs' - managing their own business on the side of their studies. 21% of all graduates claim they started a business solely because they could not find a job. In general, startups are very popular among students: 69% of all students and graduates would like to work for an entrepreneur.
Why do people become entrepreneurs?
There are many motivations people have who decide to start their own business. The top 5 reasons:
- Money: We cannot deny it, running a business will, if successful, enable you to earn a lot of money.
- Flexibility: As your own boss, there is no one to tell you what to do. You can decide yourself when to start and stop working, what to work on and where to do it.
- Control: Everything that happens within your company is approved by yourself. Having a plan for what to achieve, it might come handy that you are the one making all the decisions (at least in the early stages of your startup).
- Pick your own team: You hire the people that you want to work with. This might lead to a better atmosphere and greater productivity.
- Legacy: As an entrepreneur you often have the bigger picture in mind. You want to change the world and leave your footprint.
Are you a born entrepreneur? Many entrepreneurs have similar opinions about the typical working life and share common interests. Many of them agree that their personality and creativity do not fit the nine-to-five lifestyle. They don’t like to be trapped in a big corporation where they mark time and do only what they are told to do. They love to learn new things and can never know enough about what they are passionate about. Furthermore, people are sceptical about their ideas and deem those as ‘crazy’. It seems that ‘thinking out of the box’ has to be proven first to be accepted. Entrepreneurs want to create something that has a deeper meaning, and use this to make the world a better place. They believe that they can make an impact.
Do you see yourself while reading this? Then you might be a born entrepreneur!
There is a bright future waiting for female entrepreneurs. In 2012, women owned 36% of all business. This is an increase of over 30% since 2007. Jack Ma, Founder and CEO of Alibaba currently employs more women in his workforce than men. With 52% female employees, he knows that ‘Women balance the logic and the instinct’. He believes that men care more about themselves while women care more about others.
Where should I go as a woman to start my business? The top 5 countries according to their opportunities for female business owners ranked on a scale from 0 to 100 are the US (71), Canada and Australia (69), Sweden (68) and the UK (65). On the other hand, less recommendable are Tunisia (29), Egypt (24), India (17), Pakistan (14) and Bangladesh (12). Unfortunately, the world has not reached total equality yet. 61% of all countries still score below 50 out of 100 for women entrepreneurs’ opportunities.
How to Fund your Startup
One of the biggest barriers when launching a business is getting enough funds. Most business ideas need some investment, and starting your own company without any external money won’t work for most cases. There are many ways to get funded - we have listed the 5 most common ones for you:
- Get a bank loan or credit-card line of credit. This option might be difficult for fresh startups without any credit history. However, it doesn’t hurt to try, does it?
- Convince venture capitalists with your proven business plan. There are numerous VC’s out there trying to find startups to invest in. Make sure you serve the market well and they will see your potential.
- Start a crowd funding campaign. On sites like LetsVenture, BankerBay, BitGiving, Gofundme, Kickstarter or Indiegogo, startups are able to collect funds by different investors.
- Apply for government funds. Governments nowadays often support startups and small businesses. Make sure you inform yourself about funding possibilities, such as small business grants by your government.
- Ask your friends and family for help. If they don’t believe in your idea, who will? Especially for small startups in the early stage, this might be the crucial push to get going.
How are startups funded today? 82% of all startups today are self-funded. You can achieve this by either saving a lot of money or starting a low-cost business. 41% use loans or lines of credit, while 24% are funded by family and friends. Surprisingly, only 3% are funded by crowd funding and 1% by Venture Capital.
In which industries are startups funded the most? If you want to increase your chances to be funded externally, the top 3 industries for you to enter are Software, Media/Entertainment and Biotechnology.
Startup Failures and How to Do It Right
90% of all startups fail. Nevertheless, 68% of all entrepreneurs believe that their business idea is better than others’ in the industry. Believing in yourself, and staying positive is, however, crucial.
So why do startups really fail?
The most common reason, with 42%, is that there was no market need for the offered product or service. Defining the right target market and asking your customers explicitly what they want, and if they would like your idea is of major importance. Secondly, 29% of all failed startups claim that they run out of cash. Not having the right team of people is what 23% state to be the reason for their failure. Fourthly, as 19% of all failed startups state, more experienced competitors in their industry were too strong to keep up with. Lastly, 18% of all failed startups had pricing/cost issues for which miscalculation meant the end.
When launching your startup, it is important to keep in mind what common problems could come up, and guard against these long before they can carry into effect. Another method to prepare is to read and learn about other startup’s mistakes.
How can I succeed?
There is no general recipe for success every entrepreneur can follow. However, there are a couple of must-knows that every entrepreneur should be aware of before and during the journey of starting their own business.
First of all, believe in yourself. If you cannot believe in yourself and in what you do, it will be impossible to withstand the rough times. Just as Henry Ford once said: ”Whether you think you can, or think you can’t, you’re right”.
Secondly, always focus on the things you really care about. Starting a business solely for the sake of earning a lot of money will soon make you realize that it is neither fun nor a fulfilling way to start and grow your business. Mark Zuckerberg, Founder and CEO of Facebook, always wanted to connect people. He said that if he were to start over again, he would create something similar to Facebook one more time. He is convinced that entrepreneurship should not just mean building a company but translating your own passion into a business.
Building a good team is the third crucial tip to consider. Bill Gates, Founder of Microsoft, knows that ‘teams should be able to act with the same unity of purpose and focus as a well-motivated individual’. Not having the right people that share your values and want to achieve the same goals as you will likely make your startup fail.
Lastly, and probably one of the most important know-hows is to never give up. Founder and CEO of Alibaba, Jack Ma, can definitely tell you a thing or two about it. He was rejected by Harvard University 10 times, failed his university entrance exam 3 times and was declined as the only of 24 applicants when applying for KFC. Starting a business will result in many obstacles to overcome, but only those who keep on working hard despite others’ opinions can really succeed.
Where Should I Go? Top 15 Startup Ecosystems
The world of startups is on the rise; and with it comes a whole variety of places that offer you the right infrastructure, resources and opportunities for your startup.
Front-runner Silicon Valley is still not over trumped, but has to pay close attention to its followers. With New York City, Los Angeles and Boston following up in the US, Tel Aviv or London, there is serious competition on the go. Chicago, Seattle, Berlin, Singapore, Paris, Sao Paulo, Moscow, Santiago de Chile and Bengaluru come next, summing up the 15 top startup ecosystems worldwide. Going to these places will enable you to connect to thousands of startups, companies and resources you will need for your external supply and value chain.
Don’t Want to Work Alone? Go for Co working Space
Co working has established to be the new way of working: With all kinds of people as freelancers, entrepreneurs and travelers working together in one office, networking and skill-sharing has reached a whole new level. The trend has been very recent: Since 2010, the number of co working spaces has tripled, and in only the last 12 months, it has grown by 89%.
The United States currently rank number 1 co working nation with 781 co working offices. They are followed by Germany with 230 offices, Spain with 199, India with 170, the UK with 154 and Japan with 129 co working spaces nationwide.