North Dakota Is the Most Welcoming to the Youngest Business Owners — Find Where Your State Lands
The path to successful entrepreneurship is full of challenges. However, some obstacles are heightened for young business owners, including limited access to capital, less experience, smaller professional networks and more established competition.
The impact of these roadblocks is evidenced in the business ownership rate among young entrepreneurs. Only 0.3% of U.S. businesses are owned by people younger than 25, while 5.0% are owned by those 25 to 34, according to the newest LendingTree study.
Our research reveals that North Dakota and Utah are the most welcoming states to young entrepreneurs, while the District of Columbia, Delaware and Maine are the least friendly.
Key findings
- North Dakota is the only state in which at least 1.0% of businesses are owned by people younger than 25. The state’s top corporate income tax rate is below 5.0%, while it costs just $135 to form a limited liability company (LLC) there. Meanwhile, zero businesses in the District of Columbia and Delaware are owned by people younger than 25. (Just 13 are owned by people this young in Mississippi.)
- Utah moves to the top spot when widening to businesses owned by people younger than 35. In the Beehive State, 8.2% of businesses are owned by people younger than 35. Utah’s top corporate income tax rate is also below 5.0%, and it costs just $59 to start an LLC in the state. Conversely, the only state with less than 4.0% of businesses owned by people younger than 35 is Maine, at 3.6%.
- Just 10 states saw a percentage point increase in the rate of businesses owned by people younger than 35 over five years. The biggest increases were in New Hampshire, Iowa and Utah (all 0.5 percentage points). Wyoming (1.6 percentage points) saw the most significant decrease.
- The agriculture, forestry, fishing and hunting industry has the highest rate of businesses owned by people younger than 35 at 9.3% — with 1.1% under 25 and 8.2% ages 25 to 34. This industry provides jobs to farm workers, laborers, logging equipment operators, tractor-trailer truck drivers and more. On the other hand, just 3.8% of businesses in the management of companies and enterprises industry are owned by people younger than 35.
- More than 1 in 10 businesses (10.5%) owned by Native Hawaiians and other Pacific Islanders are operated by people younger than 35. Comparatively, just 5.1% of white-owned and 7.0% of Black-owned businesses are operated by people this young.
North Dakota most welcoming to business owners younger than 25
Our analysis shows that North Dakota is the most friendly state for business owners under 25. Of the 15,995 companies in the Midwestern state, 159 belong to owners younger than 25. While the number may seem insignificant, North Dakota is the only state in our rankings with at least 1.0% of business owners under 25.
North Dakota’s median population age is 36.2, according to the U.S. Census Bureau, younger than the national median age of 39.0, and the state’s largest age demographic is 20 to 24. These factors naturally contribute to its relatively high rate of young business owners.
Launching a small business in North Dakota is accessible. The fee to form a limited liability company (LLC) is $135, with a $50 annual report fee. (LLC filing fees can be as high as $500, according to Northwest Registered Agent, and annual costs can be $500 or more in some states.) Additionally, the state’s top corporate income tax rate is 4.31%, according to the Tax Foundation, the fourth-lowest in the country.
West Virginia and Montana finish 2nd, 3rd
Other states friendly to the youngest entrepreneurs include West Virginia and Montana, where 0.8% and 0.7% of their businesses are headed by owners under 25, respectively.
West Virginia strives to maintain a pro-business climate, passing legislation to promote and support entrepreneurship. The state’s Young Entrepreneur Reinvestment Act, passed in May 2016, waives initial business filing fees for anyone under 30. Generation West Virginia, a statewide organization that helped to pass the act, advocates for the needs of young residents and entrepreneurs in the Mountain State.
Additionally, according to a Council for Community & Economic Research (C2ER) survey via the Missouri Economic Research and Information Center (MERIC), West Virginia has the lowest cost of living in the country, more than 16% below the national average.
States most welcoming to business owners younger than 25
| Rank | State | Business owners | Business owners younger than 25 | % of business owners younger than 25 |
|---|---|---|---|---|
| 1 | North Dakota | 15,995 | 159 | 1.0% |
| 2 | West Virginia | 16,855 | 131 | 0.8% |
| 3 | Montana | 27,765 | 185 | 0.7% |
Like neighboring North Dakota, Montana has a significant representation of 20-to-24-year-olds, the state’s second-largest demographic after 60-to-64-year-olds. Montana’s LLC filing fees ($35 and no annual charge) are the lowest in the country. The state’s below-average cost of living also contributes to accessible entrepreneurship.
“The overall cost of living in an area can play a role in starting a small business,” says Schulz, author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.” “If young people have to pour all their money into the basic costs of life, such as rent and food, there’s less money to put toward starting that new business.”
District of Columbia, Delaware least friendly to business owners under 25
Conversely, the District of Columbia and Delaware don’t have any business owners under 25.
While the District of Columbia’s median age is 34.9, the second-lowest in the country, several factors could work against the area’s prospective entrepreneurs. The District of Columbia’s single-rate corporate income tax is 8.25%, the country’s 10th-highest. The initial $99 LLC formation fee is affordable; however, the $300 biennial report fee is higher than in most states. Additionally, the District of Columbia has the third-highest cost of living after Hawaii and California.
The District of Columbia’s business climate is more friendly to its older entrepreneurs, ranking third in our 2024 Boomer Entrepreneurs Report.
States least welcoming to business owners younger than 25
| Rank | State | Business owners | Business owners younger than 25 | % of business owners younger than 25 |
|---|---|---|---|---|
| 1 | District of Columbia | 9,203 | 0 | 0.0% |
| 1 | Delaware | 15,008 | 0 | 0.0% |
| 1 | Mississippi | 27,790 | 13 | 0.0% |
Delaware’s population skews older, with a median age of 41.5, versus 39.0 nationally. Despite being the sixth-smallest state by population, according to World Atlas, Delaware has the fifth-highest percentage of residents 65 and older, according to Population Reference Bureau. Also, the state imposes gross receipts taxes in addition to its 8.7% corporate income tax, the seventh-highest in the country. Forming an LLC in Delaware costs $110, with a $300 annual tax.
Mississippi is tied for the lowest rate of business owners under 25, with 13 businesses in the state owned by entrepreneurs in that demographic. The low rate is surprising; Mississippi’s top corporate income tax rate is 5.0%, and the state’s LLC filing fee is $50 with no annual costs. Additionally, the Magnolia State has the fifth-lowest cost of living in the country, and 20-to-24-year-olds make up its second-largest age group.
Factors contributing to Mississippi’s low number of young entrepreneurs may include its 19.1% poverty rate (much higher than the national 12.6% rate), according to the Census Bureau, and a low median income. Unlike Delaware and the District of Columbia, Mississippi has a median household income below the national median, $52,985 versus $75,149, indicating limited flexibility and resources to start a business.
Utah most friendly to business owners younger than 35
When the age of entrepreneurs is broadened to those under 35, Utah emerges as the most friendly state for young business owners. Of the 61,668 companies in the Beehive State, 5,037 (8.2%) have owners younger than 35.
Utah’s flat corporate income tax rate of 4.65% is the sixth-lowest in the country after two consecutive years of reductions. Starting an LLC in the state costs just $59.
The Western state’s median age, 32.1, is the lowest in the country. Over the past decade, it has consistently been cited as a top state for businesses, known for its young population, educated workforce, access to financing and low taxes. Utah is startup-friendly, with multiple programs and resources focused on funding and supporting new ventures.
States most welcoming to business owners younger than 35
| Rank | State | Business owners | Business owners younger than 25 | Business owners 25 to 34 | % of business owners younger than 35 |
|---|---|---|---|---|---|
| 1 | Utah | 61,668 | 398 | 4,639 | 8.2% |
| 2 | North Dakota | 15,995 | 159 | 988 | 7.2% |
| 3 | Iowa | 53,877 | 219 | 3,465 | 6.8% |
North Dakota is second in the country in the share of business owners under 35 (7.2%), followed by Iowa (6.8%). Iowa once had the country’s top marginal corporate income tax rate at 12.0%. However, recent tax reforms have gradually reduced the top rate to 7.1%. The rate will continue decreasing until it reaches a flat 5.5%. The corporate tax reduction plan puts the state on track to have one of the lowest rates in the country.
Iowa’s LLC formation fees are low: $50 for the initial filing and biennial report fees ranging from $30 to $45.
Maine least welcoming to business owners under 35
Maine has the lowest percentage of business owners under 35 (3.6%). Only 931 of the state’s 25,873 businesses are headed by young entrepreneurs. The low rate of young business ownership in Maine isn’t surprising given that the New England state has the country’s highest rate of residents 65 and older despite being the ninth-smallest state by population.
Maine’s top corporate income tax is the fifth-highest in the country at 8.93%, and LLC formation fees are $175 with an annual $85 report fee. Maine has the 15th-highest cost of living in the country.
States least welcoming to business owners younger than 35
| Rank | State | Business owners | Business owners younger than 25 | Business owners 25 to 34 | % of business owners younger than 35 |
|---|---|---|---|---|---|
| 1 | Maine | 25,873 | 31 | 900 | 3.6% |
| 2 | District of Columbia | 9,203 | 0 | 373 | 4.1% |
| 3 | Virginia | 115,814 | 368 | 4,536 | 4.2% |
The District of Columbia and Virginia follow Maine with the lowest under-35 rates. Only 373 of the 9,203 businesses in the District of Columbia are headed by owners 34 or younger (4.1%).
Virginia is close behind at 4.2%. Of the 115,814 businesses in the state, 4,904 have owners under 35. Virginia collects a 6.0% flat corporate income tax and permits gross receipts taxes locally.
Full state rankings
States most, least welcoming to business owners younger than 35
| Rank | State | Business owners | Business owners younger than 25 | Business owners 25 to 34 | % of business owners younger than 25 | % of business owners younger than 35 |
|---|---|---|---|---|---|---|
| 1 | Utah | 61,668 | 398 | 4,639 | 0.6% | 8.2% |
| 2 | North Dakota | 15,995 | 159 | 988 | 1.0% | 7.2% |
| 3 | Iowa | 53,877 | 219 | 3,465 | 0.4% | 6.8% |
| 4 | Alaska | 12,108 | 73 | 735 | 0.6% | 6.7% |
| 5 | South Dakota | 20,782 | 74 | 1,307 | 0.4% | 6.6% |
| 6 | Nebraska | 36,365 | 117 | 2,201 | 0.3% | 6.4% |
| 7 | Arkansas | 37,042 | 112 | 2,192 | 0.3% | 6.2% |
| 8 | Montana | 27,765 | 185 | 1,477 | 0.7% | 6.0% |
| 9 | Idaho | 37,253 | 205 | 1,993 | 0.6% | 5.9% |
| 9 | New York | 248,206 | 957 | 13,631 | 0.4% | 5.9% |
| 11 | Washington | 127,613 | 823 | 6,566 | 0.6% | 5.8% |
| 12 | California | 572,266 | 1,880 | 30,851 | 0.3% | 5.7% |
| 12 | Nevada | 38,629 | 208 | 1,978 | 0.5% | 5.7% |
| 12 | Wyoming | 15,371 | 57 | 812 | 0.4% | 5.7% |
| 15 | Florida | 308,397 | 1,228 | 16,155 | 0.4% | 5.6% |
| 16 | Texas | 307,067 | 907 | 16,068 | 0.3% | 5.5% |
| 16 | Oklahoma | 53,929 | 80 | 2,867 | 0.1% | 5.5% |
| 18 | Colorado | 110,342 | 182 | 5,817 | 0.2% | 5.4% |
| 18 | Hawaii | 17,816 | 39 | 918 | 0.2% | 5.4% |
| 18 | Wisconsin | 92,235 | 197 | 4,755 | 0.2% | 5.4% |
| 21 | Michigan | 129,862 | 503 | 6,426 | 0.4% | 5.3% |
| 21 | Delaware | 15,008 | 0 | 792 | 0.0% | 5.3% |
| 23 | New Hampshire | 21,966 | 109 | 1,035 | 0.5% | 5.2% |
| 23 | Tennessee | 75,542 | 249 | 3,645 | 0.3% | 5.2% |
| 25 | Illinois | 179,223 | 675 | 8,382 | 0.4% | 5.1% |
| 25 | Pennsylvania | 163,316 | 333 | 7,919 | 0.2% | 5.1% |
| 27 | Arizona | 84,164 | 124 | 4,104 | 0.1% | 5.0% |
| 27 | New Mexico | 25,855 | 51 | 1,237 | 0.2% | 5.0% |
| 27 | New Jersey | 126,142 | 480 | 5,770 | 0.4% | 5.0% |
| 30 | Indiana | 85,485 | 186 | 4,020 | 0.2% | 4.9% |
| 30 | Massachusetts | 90,489 | 254 | 4,175 | 0.3% | 4.9% |
| 30 | South Carolina | 61,012 | 116 | 2,844 | 0.2% | 4.9% |
| 33 | Louisiana | 53,926 | 194 | 2,416 | 0.4% | 4.8% |
| 33 | Vermont | 12,673 | 47 | 565 | 0.4% | 4.8% |
| 33 | North Carolina | 139,555 | 401 | 6,300 | 0.3% | 4.8% |
| 33 | Mississippi | 27,790 | 13 | 1,320 | 0.0% | 4.8% |
| 33 | Kansas | 43,698 | 41 | 2,053 | 0.1% | 4.8% |
| 38 | Kentucky | 50,202 | 221 | 2,161 | 0.4% | 4.7% |
| 38 | Oregon | 76,495 | 150 | 3,468 | 0.2% | 4.7% |
| 38 | West Virginia | 16,855 | 131 | 665 | 0.8% | 4.7% |
| 38 | Minnesota | 91,012 | 285 | 3,959 | 0.3% | 4.7% |
| 42 | Georgia | 119,523 | 425 | 4,980 | 0.4% | 4.5% |
| 42 | Rhode Island | 14,535 | 78 | 574 | 0.5% | 4.5% |
| 44 | Missouri | 82,832 | 215 | 3,430 | 0.3% | 4.4% |
| 44 | Alabama | 50,452 | 100 | 2,117 | 0.2% | 4.4% |
| 44 | Maryland | 77,764 | 186 | 3,204 | 0.2% | 4.4% |
| 47 | Ohio | 134,801 | 430 | 5,429 | 0.3% | 4.3% |
| 47 | Connecticut | 48,109 | 174 | 1,892 | 0.4% | 4.3% |
| 49 | Virginia | 115,814 | 368 | 4,536 | 0.3% | 4.2% |
| 50 | District of Columbia | 9,203 | 0 | 373 | 0.0% | 4.1% |
| 51 | Maine | 25,873 | 31 | 900 | 0.1% | 3.6% |
Just 10 states see increased rates of young business owners over 5 years
LendingTree researchers also analyzed the five-year percentage point difference in the rate of young entrepreneurs between 2017 and 2021. When studying how states have progressed over five years, researchers found that only 10 states saw an increase.
New Hampshire, Iowa and Utah had the most significant shifts, each increasing 0.5 percentage points between 2017 and 2021. According to the Tax Foundation, New Hampshire’s business climate has improved in recent years due to changes to its tax code. Iowa’s tax reforms, beginning in 2018, have also improved the state’s business tax climate.
Wyoming saw the most significant decrease (1.6 percentage points) in business owners under 35, from 7.3% in 2017 to 5.7% in 2021. While considered small-business-friendly (Wyoming is one of only two states with no corporate income tax or gross receipts tax), the state’s core industries — natural resources, agriculture, and tourism and outdoor recreation — took big hits from the coronavirus pandemic.
States with the biggest increases/decreases in the % of young business owners
| Rank | State | % of business owners younger than 35, 2017 | % of business owners younger than 35, 2021 | % point difference |
|---|---|---|---|---|
| 1 | New Hampshire | 4.7% | 5.2% | 0.5 |
| 1 | Iowa | 6.3% | 6.8% | 0.5 |
| 1 | Utah | 7.7% | 8.2% | 0.5 |
| 4 | Hawaii | 5.0% | 5.4% | 0.4 |
| 5 | Rhode Island | 4.2% | 4.5% | 0.3 |
| 6 | Arizona | 4.8% | 5.0% | 0.2 |
| 6 | New Jersey | 4.8% | 5.0% | 0.2 |
| 8 | West Virginia | 4.6% | 4.7% | 0.1 |
| 8 | Idaho | 5.8% | 5.9% | 0.1 |
| 8 | Montana | 5.9% | 6.0% | 0.1 |
| 11 | New Mexico | 5.0% | 5.0% | 0.0 |
| 11 | Massachusetts | 4.9% | 4.9% | 0.0 |
| 13 | Wisconsin | 5.5% | 5.4% | -0.1 |
| 13 | Mississippi | 4.9% | 4.8% | -0.1 |
| 13 | New York | 6.0% | 5.9% | -0.1 |
| 13 | Maryland | 4.5% | 4.4% | -0.1 |
| 17 | Florida | 5.8% | 5.6% | -0.2 |
| 17 | Michigan | 5.5% | 5.3% | -0.2 |
| 17 | Colorado | 5.6% | 5.4% | -0.2 |
| 17 | California | 5.9% | 5.7% | -0.2 |
| 17 | Arkansas | 6.4% | 6.2% | -0.2 |
| 17 | Washington | 6.0% | 5.8% | -0.2 |
| 23 | Vermont | 5.1% | 4.8% | -0.3 |
| 23 | North Carolina | 5.1% | 4.8% | -0.3 |
| 23 | Texas | 5.8% | 5.5% | -0.3 |
| 26 | Alaska | 7.1% | 6.7% | -0.4 |
| 26 | Delaware | 5.7% | 5.3% | -0.4 |
| 26 | Illinois | 5.5% | 5.1% | -0.4 |
| 29 | Nevada | 6.2% | 5.7% | -0.5 |
| 29 | Pennsylvania | 5.6% | 5.1% | -0.5 |
| 31 | Connecticut | 4.9% | 4.3% | -0.6 |
| 31 | Tennessee | 5.8% | 5.2% | -0.6 |
| 31 | Alabama | 5.0% | 4.4% | -0.6 |
| 31 | Nebraska | 7.0% | 6.4% | -0.6 |
| 35 | South Dakota | 7.3% | 6.6% | -0.7 |
| 35 | Ohio | 5.0% | 4.3% | -0.7 |
| 35 | Kentucky | 5.4% | 4.7% | -0.7 |
| 35 | Indiana | 5.6% | 4.9% | -0.7 |
| 35 | South Carolina | 5.6% | 4.9% | -0.7 |
| 40 | Georgia | 5.3% | 4.5% | -0.8 |
| 40 | Oklahoma | 6.3% | 5.5% | -0.8 |
| 42 | Virginia | 5.6% | 4.7% | -0.9 |
| 43 | Minnesota | 5.2% | 4.2% | -1.0 |
| 43 | Louisiana | 5.8% | 4.8% | -1.0 |
| 43 | District of Columbia | 5.1% | 4.1% | -1.0 |
| 43 | Kansas | 5.8% | 4.8% | -1.0 |
| 47 | Missouri | 5.5% | 4.4% | -1.1 |
| 47 | Oregon | 5.8% | 4.7% | -1.1 |
| 49 | North Dakota | 8.4% | 7.2% | -1.2 |
| 50 | Maine | 5.1% | 3.6% | -1.5 |
| 51 | Wyoming | 7.3% | 5.7% | -1.6 |
Agricultural industry has highest rate of young business owners
Some industries stand out as being young-business-owner-friendly. The agriculture, forestry, fishing and hunting industry has the largest share of businesses with owners under 35 (9.3%), with 1.1% under 25 and 8.2% between 25 and 34.
The industry includes jobs for farm workers, laborers, logging equipment operators, tractor-trailer truck drivers and related employment. While multiple factors likely contribute to the higher rate of young owners in the agricultural sector, one may be the passing down of family businesses.
“Part of the reason agricultural-related businesses are likely to be owned by younger people is that they’ll have taken over ownership from their parents,” Schulz says. “Many of these jobs are extremely physically taxing, so it seems reasonable that a parent might hand over the reins of the family business to one of their children at a relatively early age.”
Lowest rate of young business owners in the management of companies and enterprises industry
Conversely, the management of companies and enterprises industry has the lowest rate of young owners. Only 3.8% of businesses in the sector, which includes accountants, auditors, bookkeepers, financial managers, office managers and similar positions, have owners under 35.
Breaking that down, the management of companies and enterprises industry has the lowest rate of owners under 25 (0.1%), tied with the mining, quarrying, and oil and gas extraction industry, and it has the second-lowest rate of workers 25 to 34 (3.7%), tied with the real estate and rental and leasing sector.
Babson College’s Global Entrepreneurship Monitor (GEM) report shows an entrepreneurial shift from finance, real estate and business services in the past few years. In 2022, 16% of entrepreneurs represented those fields, down from 30% in 2020. This trend is evident in the bottom five industries for entrepreneurs under 35.
Industries most, least welcoming to business owners younger than 35
| Rank | Industry | % of business owners younger than 25 | % of business owners 25 to 34 | % of business owners younger than 35 |
|---|---|---|---|---|
| 1 | Agriculture, forestry, fishing and hunting | 1.1% | 8.2% | 9.3% |
| 2 | Information | 0.4% | 8.4% | 8.8% |
| 3 | Arts, entertainment and recreation | 0.6% | 7.5% | 8.1% |
| 4 | Educational services | 0.5% | 7.3% | 7.8% |
| 5 | Accommodation and food services | 0.4% | 7.0% | 7.4% |
| 6 | Transportation and warehousing | 0.4% | 6.4% | 6.8% |
| 7 | Other services (except public administration) | 0.3% | 6.1% | 6.4% |
| 8 | Administrative and support and waste management and remediation services | 0.5% | 5.6% | 6.1% |
| 9 | Retail trade | 0.4% | 5.5% | 5.9% |
| 10 | Utilities | 0.9% | 4.9% | 5.8% |
| 11 | Industries not classified | 0.3% | 5.4% | 5.7% |
| 12 | Construction | 0.4% | 4.8% | 5.2% |
| 13 | Health care and social assistance | 0.2% | 4.7% | 4.9% |
| 14 | Mining, quarrying, and oil and gas extraction | 0.1% | 4.3% | 4.4% |
| 15 | Manufacturing | 0.3% | 3.9% | 4.2% |
| 15 | Professional, scientific and technical services | 0.3% | 3.9% | 4.2% |
| 17 | Real estate and rental and leasing | 0.4% | 3.7% | 4.1% |
| 18 | Finance and insurance | 0.2% | 3.8% | 4.0% |
| 19 | Wholesale trade | 0.3% | 3.6% | 3.9% |
| 20 | Management of companies and enterprises | 0.1% | 3.7% | 3.8% |
Demographics: Youngest business owners by race, gender
Our study shows a higher rate of young business owners among communities of color — 10.5% of businesses owned by Native Hawaiians and other Pacific Islanders are headed by people under 35, nearly double the share of all companies regardless of the owner’s race (5.3%).
While not in the double digits, the percentage of Black-owned businesses with owners under 35 also tracks higher (7.0%), as does the rate for Asian-owned companies (7.1%). By contrast, just 5.1% of white-owned businesses are operated by owners under 35.
According to Babson College’s GEM report, entrepreneurs of color tend to be younger than white business owners. White business owners are typically in the midcareer stage (ages 35 to 44), while Latino and Black entrepreneurs generally are in earlier stages. Entrepreneurs of color are often more likely to start a small business out of necessity than their white counterparts.
Races with highest, lowest rates of business owners younger than 35
| Rank | Races | % of business owners younger than 25 | % of business owners 25 to 34 | % of business owners younger than 35 |
|---|---|---|---|---|
| 1 | Native Hawaiian and other Pacific Islander | 1.7% | 8.8% | 10.5% |
| 2 | American Indian and Alaska Native | 0.8% | 7.1% | 7.9% |
| 3 | Asian | 0.4% | 6.7% | 7.1% |
| 4 | Black or African American | 0.7% | 6.3% | 7.0% |
| 5 | White | 0.3% | 4.8% | 5.1% |
Our research also shows a slightly higher rate of female business owners 25 to 34 than male owners — 5.4% versus 4.9% — but the same share of owners under 25 (0.3%).
The higher share of young female entrepreneurs bucks the general trend of a higher rate of male-owned businesses. Today’s 14 million women-owned U.S. businesses account for 39.1% of the country’s companies, according to Wells Fargo.
While the share is less than half, the growth of female-run businesses between 2019 and 2023 was nearly double that of male-owned companies (13.6% versus 7.0%), according to Wells Fargo data. The significant increase was fueled in part by young entrepreneurs. According to Babson College’s GEM report, the rate of entrepreneurship among 18-to-34-year-olds in the U.S. is 27%, compared with 14.5% among 35-to-64-year-olds.
Gender breakdown: Business owners younger than 35
| Gender | % of business owners younger than 25 | % of business owners 25 to 34 | % of business owners younger than 35 |
|---|---|---|---|
| Women | 0.3% | 5.4% | 5.7% |
| Men | 0.3% | 4.9% | 5.2% |
How to start a business as a young entrepreneur
Close to 1 in 4 U.S. businesses fail within their first year of operation, according to a LendingTree analysis of U.S. Bureau of Labor Statistics (BLS) data. This means you’ll face challenges as a new entrepreneur regardless of age. To own one of the companies that survive that first year and beyond, you’ll need a realistic view of what it takes to start and run a business. These tips will help improve your chances of success.
- Spend adequate time in the planning phase. “It has never been easier to start a small business,” Schulz says. “It can be so easy, in fact, that people may rush into it without doing their homework. Before you start, research your competition, line up funding and understand your target audience. “The odds are stacked against any new business, and a well-thought-out business plan certainly won’t guarantee success, but if it can help shift the odds in your favor even just a bit, it is worth doing.”
- Explore available resources. “Many businesses, nonprofits and other organizations exist to help small businesses of all types thrive,” Schulz says. “There are agencies at every level of government, along with religious groups and other nonprofits in your area, that can make a huge difference, whether you’re looking for small business loans, marketing help, networking, training or help with virtually any other aspect of running a business.” The Small Business Administration, U.S. Chamber of Commerce, Minority Business Development Agency, SCORE, Small Business Development Centers and Women’s Business Centers are a handful of resources available. “Taking the time to Google ‘small business resources near me’ can pay big dividends,” Schulz says.
- Leverage credit strategically. “Credit cards power countless businesses in this country,” Schulz says. “They can be an incredibly useful tool in managing business funds when used wisely, but when used recklessly, they can do a lot of damage. Remember, just because someone will extend you a significant amount of credit doesn’t mean you have to take all or spend most of it.”
- Be flexible throughout your journey. An unspoken rule of entrepreneurship is to be flexible. From your business idea to marketing to funding sources, you’ll need to be able to adapt and course-correct often. Keeping that in mind before you begin will help you be resilient to the inevitable bumps.
Methodology
LendingTree researchers analyzed U.S. Census Bureau Annual Business Survey data.
Specifically, researchers compared the number of business owners younger than 25 and ages 25 to 34 to the total number of businesses. We ranked U.S. states from high to low based on the combined percentages. We also calculated the five-year percentage point change. Lastly, we calculated these figures by industry, race and gender.
Data is from the 2022 (covering 2021) and 2018 (covering 2017) surveys.