A successful business requires a lot more than just a good idea. You need organizational skills, creativity, a knack for paying attention to the details and an ability to keep going when things get tough. And even if you’re successful in getting your business off the ground, it takes time to grow and gain traction. It might take years before you turn a profit, and in the meantime you’ll need to work hard to make ends meet.
Often, entrepreneurs start with an idea for a product or service that can address a significant problem. For example, Chinese entrepreneur Jack Ma started his online retail company Alibaba with the aim of making it easier for small businesses in China to connect with the rest of the world. The company now has revenues of more than $160 billion.
Another important factor in business creation is the entrepreneur’s profile. Researchers have studied personal factors that determine an entrepreneur’s decision to start a business, including cognitive variables such as perception of opportunities and self-efficacy (Alvarez and Urbano Reference Alvarez and Urbano2011b; Garcia, Martinez, and Fernandez Reference Garcia, Martinez, and Fernandez2010).
The present study explores a range of features related to contemporary business creation using data from representative samples of early stage nascent ventures in the United States. It sheds light on the determinants of business creation and focuses on the characteristics of the two-fifths of new firms that achieve profitability. It also examines the influence of a range of contextual variables that affect entrepreneurial behavior and firm performance, such as regional economic conditions and government policies.