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Industry Outlook

Entrepreneurship has long been considered risky, although that perception is slowly changing, thanks to the number of successful online businesses. Still, it takes considerable money, time, and effort to open a business and to keep it going long enough to start seeing profits. Success also depends on trends, customer demand, political climate, competition, the economy, and other unpredictable social factors. The longer a company remains in business, the more likely it is to succeed. However, companies can still go out of business up to 15 years after launching. According to Small Business Administration data, seven out of 10 new employer firms survived at least two years; 50 percent survived at least five years; a third of the companies survived at least 10 years; and 25 percent survived 15 years or more. The Pew Research Center reported that there were approximately 14.6 million self-employed Americans in 2014, representing 10 percent of America's 146 million workers. These self-employed workers in turn created 29.4 million jobs, many of which were with incorporated businesses. Of the self-employed businesses with staff members in 2014, the median was three paid employees. Overall, the number of self-employed workers in the U.S. has declined from 12.2 percent of the American workforce in 1994 to 10 percent in 2014. In spite of the risks associated with starting a business, entrepreneurship continues to be strong. It is part of the American identity—the United States is viewed worldwide as a land of opportunity. People have increasingly turned to starting a small business as an alternative for employment while the job market remains highly challenging. There are no educational, racial, or gender barriers to starting a new business, so there are opportunities for people of all backgrounds. Minority-owned businesses include more than 5.8 million firms that generated more than $120 billion in revenues as of 2007, according to the most recent data reported by the Census Bureau. About one in five of all minority-owned firms had paid employees. The trend in home-based businesses is growing rapidly. The trend was started initially by women who wanted to stay home to care for their children but either didn't want to give up their jobs or needed the income. Now more than half of the people working from home are men. Other factors that have contributed to the increase of at-home businesses include downsizing during hard economic times, the growth of the Internet and computer technology, and the growth of the service sector of the economy. Many college students are financing their educations through working at home as freelance workers or independent contractors. This sector of entrepreneurs is expected to continue to grow. The freelance population is expected to account for a large percentage of all workers in the next few years. The U.S. Bureau of Labor Statistics predicts that by 2022, nearly half of all occupations will consist of self-employed workers.

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