According to the 2026 Entrepreneurship Report from Intuit QuickBooks, the average American believes it takes $28,000 to launch a new business. In reality, current owners say the median startup cost is closer to $12,000 – less than half of the imagined figure.

Entrepreneurial optimism on the rise

One in three U.S. adults (33%) say they plan to start a new business or side hustle in 2026, a 94% jump from the previous year. Entrepreneurship now ranks as the top wealth‑building strategy, surpassing traditional savings, investing, or earning more at a conventional job.

Pressure to act quickly

More than two‑thirds (68%) of prospective founders feel pressure to launch within the year, and 57% say they will move forward even if economic conditions are not ideal. Yet 47% cite money as the single biggest hurdle.

Where the money myth creates a barrier

The $28,000 estimate is more than double what owners actually spend. This misperception can stop people before they even begin. Only 13% of would‑be entrepreneurs have most of the cash they think they need, while 32% have less than a quarter of it.

Funding sources are personal, not commercial

Most aspiring founders plan to rely on personal savings (66%) or personal credit cards (45%). The imagined $28,000 is not a commercial loan request; it is a self‑funded figure that can feel insurmountable.

Modern businesses cost less

The higher figure likely assumes a traditional brick‑and‑mortar operation with lease, build‑out, inventory and signage. Today’s entrepreneurs often run service‑focused, home‑based ventures—consulting, bookkeeping, design, freelancing—that avoid heavy overhead.

Other obstacles beyond cash

When asked what stops them, 47% point to money, 33% to fear of financial failure, and 24% to difficulty accessing credit. Additionally, 24% cite lack of time and 22% cite insufficient business knowledge.

Self‑rejection in funding applications

Among current owners, 35% never applied for business funding because they expected rejection, even though many were never turned down. This self‑rejection is especially pronounced among Black owners, who are more than twice as likely as their white, Hispanic, and Asian peers to believe their race, gender, or age would count against them.

Financial‑skill confidence gap

More than half (52%) of aspiring entrepreneurs lack confidence in essential financial tasks such as cash‑flow management, expense tracking, invoicing and tax handling. Seventy‑one percent say this gap makes it harder to reach personal financial goals.

Side hustles thrive outside the formal economy

Nearly half of Americans (47%) earned income from a side hustle in the past year, yet only 20% formally registered their work as a business. Side‑hustlers average 19.5 hours per month and bring in about $2,038 monthly, outpacing any other surveyed nation.

Business applications vs. employer creation

U.S. Census data shows 473,679 business applications were filed in August 2025, but only 28,725 are projected to become employer businesses within four quarters. Many entrepreneurial activities remain informal and unregistered.

AI is reshaping startup costs

Sixty‑five percent of aspiring owners plan to use artificial intelligence to launch their ventures, with 31% saying they are very likely to do so. AI tools are being applied to market research, website creation, branding and more, reducing traditional budget line items.

Impact of AI adoption

Among businesses using AI, 29% report cost reductions, 43% see higher revenue, and 78% note improved productivity. Regular AI use among U.S. businesses rose from 48% to 77% between July 2024 and January 2026.

Personal sacrifices of owners

Eight in ten owners (82%) made significant personal sacrifices in the past year, and 54% reduced their own pay at least once to keep payroll covered. The most common definition of success (35%) is achieving profitability without the owner’s daily involvement.

These findings suggest that the perceived high cost of starting a business is a major, yet largely unnecessary, barrier. By correcting misconceptions and improving financial confidence, more Americans could turn entrepreneurial ideas into thriving enterprises.

Original reporting: El Paso News (HLL/CB) — read the source article.