August 26, 2019
Main Street Monday – Number of Young Entrepreneurs Down to Just 4% According to New Infographic Report
American entrepreneurs average 400,000 new start-ups each year. However, according to a new infographic report by Lance Surety Bond, one group of entrepreneurs appears to be the exception, young entrepreneurs.
The number of entrepreneurs, between the ages of 25 to 34, is down to approximately 4%, the lowest it has been since 1989. Since baby boomers and the general population is aging and retiring, the decline of young entrepreneurs raises a serious concern for the future outlook of business.
Lance Surety Bond’s infographic highlights several reasons for the decline in young entrepreneurs. Here are the highlights:
1. Fear of Failure
Overall, 33% of Americans report the fear of failure prevents them from starting a business. The number of young entrepreneurs reporting a fear of failure comes in at 41%, eight percentage points higher than the overall American population.
2. Higher Education
Lance Surety Bond’s report indicates that higher education reduces the entrepreneurial spirit. For those who pursue higher education, entrepreneurship tends to take a back seat.
Due to lack of credit history, savings, and sources of capital, it is more difficult for young entrepreneurs to obtain the necessary financing to get a business up and running.
Lance Surety Bond’s report also cites competition, lack of succession planning, lack of experience, and weak networking connections as other reasons for why young entrepreneurs are not starting their own small businesses.
Motivation and Help for the Younger Generation
Lance Surety Bond suggests addressing the issue from several different angles:
- The educational system should focus on the importance of mastering the skills required to successfully launch a small business.
- Public and private entities should encourage young adults to get excited about starting their own businesses and provide the necessary resources and support to get them started.
- Small business mentors should help young entrepreneurs get connected with resources that can help them financially. The SBA already provides a number of great resources for entrepreneurs of any age to kick off a small business.
Click here to see the infographic in its entirety, as shared by Small Business Trends.