Is Entrepreneurship the Path to Wealth and Wellbeing?

The majority (67%) of owner-employers are thriving in wellbeing, compared to 52% of employees and 48% of self-employed workers, found a new Gallup report Entrepreneurial Insights: Owning and Employing as a Pathway to Wealth and Wellbeing. An owner-employer is defined by Gallup as employers who primarily work as a business owner and employ at least one other person.

While entrepreneurship has long been a pathway to wealth, the Gallup research looked at the impact entrepreneurship can have on employee-owners’ lives beyond growing their bank accounts. In turn, adults who employ others scored higher than other groups, including employees and non-employer owners, on several measures, including income, wealth, life evaluation, and work engagement.

The entrepreneurial pathway to wealth and wellbeing often requires employing others. For example, being a business owner with no employees is not associated with significantly higher income, wealth, or life and job satisfaction. However, just 9% of business owners currently employe others, and among all working adults, just 2.4% are owner-employers.

Other indicators of wellbeing include three in four owner-employers (75.4%) reporting high levels of engagement at work, compared with 68.1% of non-employer owners and 50.9% of employees. Regarding financial wellbeing, 58.4% of owner-employers said they live comfortably on their present income, compared with 36% of non-employer owners and employees.

Additionally, owner-employers rated their overall lives much higher than other workers do. Two-thirds of owner-employers (66.7%) rated their current and future lives highly enough to be considered “thriving” on a zero-to-10 scale, according to Gallup. That figure compared to slightly more than half (52.1%) among non-employer owners, 50.7% among employees, and 48.1% among self-employed workers.

Startups are fragile, though, and becoming an owner-employer is not a small feat: 17% of employer-firms close within one year and half within five years, according to the Annual Review of Economics. Growing to the point of employing other people is a hurdle most businesses never get over either. In 2021, 5.4 million business applications were filed with the Internal Revenue Service, according to the U.S. Census Bureau. Of those, only 476,000 (9%) employed workers when they launched, the bureau said.