Editor’s note: This article was first published in May 2014. Its data are from 2014: a US corporate tax rate “around 40%” (cut to 21% from 2018), and the US ranked behind Singapore, Hong Kong and New Zealand for ease of starting a business. Obama is described as the current president.
When we looked at the main differences between the business mindset in the United States and in Spanish-speaking countries, we said that if you give a Spanish businessman a good hamburger, he opens a neighbourhood burger joint, while if you give an American a bad hamburger, he creates McDonald’s. And someone else quickly copies the business model and creates Burger King. But mindset is not everything.
A report by the Centre for Policy Studies in London found that the United States is the third country that has produced the most self-made billionaires, behind only Hong Kong and Israel. And several reports place the United States as one of the best countries in which to become a millionaire, because of the opportunities it offers, as well as one of the best places to start new, profitable and innovative businesses.
What makes the United States such a good country for entrepreneurs?
Low taxes
With the corporate tax rate at around 40%, some might think it is hardly a bargain, but the truth is that the US tax structure has been cited as one of the country’s main strengths for entrepreneurs. According to the report, the discrepancy lies in the fact that US taxes, measured as a share of GDP, are remarkably low.
In the United States they know that raising taxes discourages entrepreneurship. Both the right and the left are clear on that.
Warren Buffett himself has called for business owners and millionaires to pay more tax. In what other country in the world does a billionaire ask to pay more, on the grounds that big companies pay more or less the same taxes as workers?
How easy it is to start a business
Although entrepreneurs in the United States complain about the complexity of the regulatory environment, the truth is that it is one of the easiest countries in the world in which to start a business, behind only Singapore, Hong Kong and New Zealand.
If you have had a business idea and you are sure you want to go ahead, you can be up and running as a company within 72 hours.
When taxes, regulation and ease of doing business are measured together, the United States gets the best score of all the G-20 countries.
Easy access to money
As the financial centre of the world, one of the United States’ greatest advantages is its financial markets, which are not only large but also efficient and highly liquid. The US is the cradle of business financing, with angel investors, venture capital firms, banks specialising in businesses and crowdfunding solutions to provide the funding that companies with innovative ideas need.
When a company fails in the US, a lack of funding is rarely the reason.
Entrepreneurial culture
The entrepreneurial spirit is essential, and in the United States it is encouraged from childhood. Today it is the founders of Facebook, Google and Apple. In their day it was Henry Ford and Rockefeller. In 20 years there will be new millionaires, and in all likelihood they will be American.
American entrepreneurs get a head start at university, because across the pond university is not used to fill your head with theory but to teach you how to build a company. Both Google and Facebook were created under a university roof. Apple and Microsoft also got their start while their founders were at university. University is seen as a way to bring entrepreneurs together with other entrepreneurs and create synergies.
Americans are also open to the risks that come with starting a business. They do not like to fail in business (nobody anywhere does), but they do not fear it more than they need to.
Of course, as we discussed in a previous article, the financial and personal damage of a single failure in Spain is much greater than failing three times in the United States.
The report mentions President Obama, who has publicly supported small and medium-sized businesses, calling them the engine of the US economy: real support that goes beyond words.
In short, the United States is, and will remain, an inexhaustible source of businesses and self-made millionaires. There is a reason it is called the land of opportunity, where supposedly anyone has a chance to build something great. Along the way, entrepreneurs are pushed forward, while in many other places there are nothing but obstacles and tripwires that can end up killing the entrepreneurial spirit.
Further reading
- 6 business ideas that started in the United States
- 8 habits millionaires share
- The secret of millionaires, told by millionaires
Featured image: Ford Motor Company. Photographic Department, Public domain, via Wikimedia Commons.
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