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What Is the Salary Range for an Entrepreneur?
Entrepreneurs are truly living the American dream, and they're getting paid. More than half of small business owners paid themselves a regular salary in 2013. The best part is that they are their own boss. It kind of makes you jealous when you're dealing with cranky coworkers at a tiring nine-to-five, right? Is being an entrepreneur a feasible end game? Can you handle the work required to build something from the ground up? How much is an entrepreneur salary, anyway?
Not everyone can be Jeff Bezos or Mark Zuckerberg. Bezos became one of the richest men in the world with an estimated $170 billion net worth after he founded Amazon. He even dethroned Microsoft bigwig Bill Gates. Zuckerberg crafted the early beginnings of Facebook from his Harvard dorm room and went on to build a $70 billion empire. Even YouTube entrepreneurs like the controversial Logan Paul can make $12.5 million a year posting videos from their bedrooms. That's not the norm, but it's not impossible.
The average salary of an entrepreneur is between $58,000 and $68,000 per year, but it varies greatly depending on the industry. The top entrepreneurs can make millions, while others can go completely bankrupt.
Entrepreneurs are people who follow through. They take all those ideas that spark late at night or during long drives and actually make them happen. They are the business owners of America who build their dreams from the ground up. Pretty much every product you own was initially created by an entrepreneur, from your computer to your T-shirt to the box of cereal you picked up at your local grocery store. Have you ever met someone who said he is self-employed? It's more than just a tax designation; it's a way of life. They are entrepreneurs.
Anyone who's ever seen "Shark Tank" knows that there's more than one kind of entrepreneur. Some, like Bezos and Zuckerberg, work on a single company and build it from the bottom up. Others, like Tesla founder Elon Musk, branch off and end up selling a number of different products. In Musk's case, that portfolio includes cars, satellites and consumer-minded flame throwers.
Not all entrepreneurs stick to the tech space, though that seems to be a huge moneymaker in the era of Silicon Valley. Celebrity entrepreneurs like Daymond John of "Shark Tank" grew his clothing company FUBU from sewing machines in his mother's basement to a $350 million empire off the back of a meager job at Red Lobster. He's since invested in a number of different businesses including Bubba's-Q Boneless Ribs. He helped the company grow from $154,000 to over $16 million and pulled in a hefty chunk of change in the process.
At the end of the day, an entrepreneur is anyone who starts a business, from YouTube entrepreneurs and your favorite singers to cupcake company startups and failed iPhone apps. This makes it almost impossible to give an accurate salary estimate, but one thing is true. Entrepreneurs stand to make a lot more cash than those of us working a nine-to-five job, but they also adopt all of the risk.
Don't let Mark Zuckerberg's Ivy League education fool you. Entrepreneurs don't need an education to succeed. There are stories of high school dropouts hitting it big and business school graduates failing hard. Many entrepreneurs opt to learn as they go. However, some do choose to attend business school to help them learn how to manage and develop a business.
There's no one industry in which entrepreneurs work, but many entrepreneurs contribute to the gig economy (an increasingly popular trend in 2018). For millennials, this means piecing together different jobs and contract positions to make a full-time income, and it's not surprising. According to the Bureau of Labor Statistics, jobs created by startups have decreased by over a million in the last 20 years. With the average retirement age increasing and wages remaining relatively stagnant for decades, a large swath of the population has taken control of their finances by starting their own business.
It's undeniable that the tech space is ultra trendy for entrepreneurs. Services like Uber, Etsy and YouTube have made it easy for entrepreneurs to generate a substantial entrepreneur salary. You can now launch a T-shirt business with the click of a button or run your own taxi services where and when you want without doing much legwork beyond owning a qualifying car. In fact, some entrepreneurs choose to work a self-employed gig like Uber while working on a second business venture.
A YouTube business salary also shows the highs and lows of true entrepreneurship. While most users don't make any money, a large swath of hard-working YouTube entrepreneurs have amassed multimillions in sponsorships, branded content and advertising revenue. In the world of entrepreneurship, only the savvy survive.
Though tech seems to be a popular trend, entrepreneurs can work in any industry, including beauty, personal care, food, auto, publishing, music and beyond. According to the Bureau of Labor Statistics, businesses in the health care and social services space generally have the highest survival rate.
Years of Experience and Salary
When you're starting a business, income is unpredictable, and the first few years are always the hardest. Finding clients, securing loans and following state-mandated rules and regulations pose a huge risk that many business owners can't successfully navigate. In the United States, the average entrepreneur has been working between two to four years. A business will typically succeed or go bust within that time frame, though there's always a chance that a business will fall out of favor as technology and tastes change. In recent years, once-beloved retailers Sears and Toys "R" Us have each gone bankrupt, largely due to online shopping habits championed by services like Amazon. These businesses were launched by hopeful entrepreneurs who enjoyed decades of success before throwing in the towel.
Entrepreneurs take on the biggest risk in a business. Many of them don't get a typical business salary, especially when times are rough. They're the ones responsible for paying back loans and vendors. They're the ones who must attract investors. They're responsible for their business's salaries and payroll. They're also the ones sitting in bankruptcy court when things don't pan out. On the other hand, they have the biggest rewards. Many small business owners designate themselves as CEO of their company. According to Forbes, CEOs make an average of 361 times more than an average worker.
To everyone who ever said "don't quit your day job," most entrepreneurs actually have not heeded that advice. Over half of small business owners pay themselves a salary. Just 15 percent of entrepreneurs need to work a second job to support their dream, but that's frequently temporary. More than half of small business owners have a positive outlook about their business prospects, and four in 10 think their revenue will increase. In other words, if a business doesn't end up failing altogether, an entrepreneur most likely makes a healthy wage compared to her employees.
Regardless of success or failure, Sokanu claims that entrepreneur salaries typically range from $10,400 to $129,200. According to Indeed, the average is somewhere around $58,000 a year. According to Fox Business, the average is closer to $68,000 a year. These figures are actually a decrease from the $72,000 a year generated by the average entrepreneur in 2012, but entrepreneurship in general may be rising in popularity.
Job Growth Trend
In the world of entrepreneurship, it's all about need. If you're selling a product people don't want, you probably won't get very far. According to the Bureau of Labor Statistics, real estate, cosmetology and landscaping have the highest projected growth for self-employed workers. On the other hand, the number of entrepreneurs involved in door-to-door sales, news and street vending and farming and agriculture is expected to backslide. Overall, the employment of top executives (including the CEOs founding the country's newest wave of businesses) is projected to grow by 8 percent, the average of most fields.
- Business Insider: Before Daymond John Became a Millionaire Investor on 'Shark Tank,' He was Waiting Tables at Red Lobster and Talking His Way onto LL Cool J's Music Video Sets
- Business Insider: Meet the YouTube Millionaires
- Fox Business: And, the Average Entrepreneur's Salary Is...
- Forbes: Does It Pay To Become An Entrepreneur?
- PEW Research Center: For Most U.S. Workers, Real Wages Have Barely Budged in Decades
- Indeed: Entrepreneur Salaries in the United States
- Bureau of Labor Statistics: Entrepreneurship and the U.S. Economy
- Bureau Of Labor Statistics: Self-Employment: What To Know To Be Your Own Boss
Mariel Loveland is a small business owner with an editorial background in lifestyle and technology. Her work has been featured in Alternative Press, Vice and HelloGiggles. When Mariel's not writing, she can be found swishing her hair on stage with her punk band and managing the ins-and-outs of self-employment.