Entrepreneurs Expect Modest Startup Costs For Most New Ventures

Entrepreneurs project modest startup costs for most new ventures, according to a study released today by the Office of Advocacy. Solo entrepreneurs expect median startup costs of $6,000, while the median cost expected by team ventures is $20,000. More than 80 percent of the entrepreneurs studied expected to cover their startup costs without bank loans, although on average they had saved only $2,000 towards that goal.

"Not all new ventures require large infusions of capital," said Dr. Chad Moutray, Advocacy’s Chief Economist . "Everyday ordinary Americans strike out on their own to grab their piece of the American Dream. It doesn’t take a lot of savings to participate in the ownership society, just a good idea and lots of hard work and perseverance," he said. His remarks came at the report’s release during the annual meeting of the Collegiate Entrepreneurs Organization in Chicago.

The study also showed that optimism about their business potential underlies the entrepreneurs’ activities. On average, solo entrepreneurs believe they will have business income of $90,000 in the fifth year of their venture, while team ventures expect an income of $125,000 in the fifth year. The higher team venture projected income makes it more likely that such ventures will result in new job generation.

Expected Costs of Startup Ventures, conducted by Blade Consulting with funding from the Office of Advocacy, used data from more than 800 nascent entrepreneurs – individuals who are in the process of starting a business – gathered over a two-year period. The data are contained in the ongoing Panel Study of Entrepreneurial Dynamics (PSED), supported by the E.M. Kauffman Foundation.

The Office of Advocacy, the "small business watchdog" of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information and the complete text of the study, visit the Office of Advocacy website at http://www.gov/advo

You may like these other stories...

Credit Suisse says pension assets at risk unless court delays sentencingJohn Letzing of the Wall Street Journal reported on Wednesday that Credit Suisse Group AG says its management of billions of dollars in assets for...
The prospect of International Financial Reporting Standards (IFRS) being fully adopted in the United States in the near future are growing less likely, as the Financial Accounting Standards Board (FASB) and the International...
House proposes $10.5B, eight-month highway billThe House Ways and Means Committee proposed a transportation funding bill on Tuesday that calls for a temporary extension of current transportation funding levels until May 31,...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.