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In a sign that the U.S. economy is on the (gradual) upswing, the entrepreneurial rate in the U.S. is now higher than it was at the height of the dotcom bubble of 15 years ago, according to the Kaufman Index of Entrepreneurial Activity (KIEA)which currently lists more than 20 million...

By Laura Mazzuca Toops | Updated on May 01, 2014
In a sign that the U.S. economy is on the (gradual) upswing, the entrepreneurial rate in the U.S. is now higher than it was at the height of the dotcom bubble of 15 years ago, according to the Kaufman Index of Entrepreneurial Activity (KIEA)—which currently lists more than 20 million non-employer businesses, with more starting every day.

As defined by the Census Bureau, non-employer businesses have no paid employees, annual receipts of at least $1,000, and are subject to federal income taxes. These new businesses can range from part-time consultants to billion-dollar start-ups backed by big private-equity money.

But no matter the size of the business, the journey to successful entrepreneurship can be treacherous. According to the U.S. Census Bureau, 16% of companies fail their first year of operation, and 32% fail within their first three years (see chart, p. 42). Most of those failures are due to incompetence and lack of experience, according to a January 2014 study in Entrepreneur Weekly by the Small Business Development Center at Bradley University and University of Tennessee Research.

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