September 23, 2014

Single Person Businesses Booming

The U.S. Census has new statistics out — and they show that the numbers of single-person businesses are booming. There are now over 20 million such businesses, based on the most recently available data as of 2005.

To be exact, the United States has 20,392,068 single-person businesses. In the space of three years, 2.7 million more people became the owner of a “business of one.” Here’s the chart (you knew there’d be a chart, right?):

Number of single-person or nonemployer or personal businesses in United States

For the past three years the number of single-person businesses has grown each year between 4% and 5%. That means the single-person businesses grow faster than the rate of growth of the U.S. population as a whole (which grows at about 1% a year according to the U.S. Census).

These single-person businesses account for 78% of ALL U.S. businesses. You know those millions of small businesses that everyone is always talking about? Well, the majority of them fall into this category of single-person business.

These single-person businesses bring in over $951 billion (US) in annual receipts or sales to the U.S. economy. That averages to roughly $46,600 in annual sales per business. Obviously, since it’s an average, some businesses will be larger and some smaller. Still, you can see that many are pretty small businesses. Whatever their individual size, collectively these business owners are a force because of the sheer numbers of them.

Statistics like this can seem conflicting and confusing, in part because the terminology is all over the map.

For instance, these single-person businesses are regularly referred to by other labels such as:
– nonemployer businesses (the U.S. government name)
– personal businesses (the trendy term)
– no-employee businesses (what analyst firms sometimes call them)
– self-employed individuals
– microbusinesses (generally, businesses with fewer than 5 employees)
– SOHOs (small office, home office)
– home-based businesses
– entrepreneurs
– freelancers (added per Rene’s comment below)

In some cases these terms refer to the universe of single-person businesses. In other cases they refer to just a certain subset of single-person businesses, or they include some businesses with employees. If you see what appear to be conflicting statistics, make sure you know exactly which businesses they cover.

Go here for the detailed U.S. Census statistics on single-person businesses.

Note: please feel free to copy the above chart for your blogs, reports and presentations, as long as you retain the copyright notice — thanks, Anita!

42 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

42 Reactions

  1. Isn’t the label ‘freelancer’ used for at least some single-person businesses as well?

  2. The Next Best Thing to Being There. I run a single-person marketing consultancy where I have to present, brainstorm and co-edit with partners and and clients everywhere. I recently came across a hosted videoconferencing and collaboration tool that’s like being there in person. Saves a ton of time and makes the single person/small business look a bigger and more sophisticated.

    Very slick. KnowledgeNetworks at http://poundi.com/knowledgeltd.com/.

  3. Yes, Rene, you are absolutely correct — sometimes this group is known as “freelancers.” I edited the article to add your suggestion. Thank you! Anita

  4. Anita,
    Great article. As a local franchise expert/consultant who meets with downsized execs etc. I am definitely seeing a trend of my candidates wanting small home based or small office type consulting businesses. Less overhead, and lower risk, but only, and let me emphasize only if they possess strong sales and marketing skills, and have the desire to not be in the “office”, but out and about networking and calling on potential clients.
    Joel Libava/AKA Franpro

  5. Home business is definitely a trend. Based on the figures provided by the chart, almost all people in the US have their own business. This is great, considering that having our own business is what most of us want.

  6. Hi Anita,

    I am very glad to read your article, and learn about this trend, because I am part of it! :))
    Thank you for the information and the link!

    Regards,
    William

  7. Does the data suggest these Single Person Businesses also have a full time job? I wonder how many of these freelancers started with a business plan or were forced into businesses due to downsizing?

  8. Richard,
    I do not have the exact figures, but my experience in working with the downsized suggests that 30-35% of the single person businesses are owned by folks that were downsized.
    Joel Libava

  9. I think the number of single person business will keep on increasing. It’s basically a great way of living with no superiors to bother us. And we get to decide our own schedule which we find most comfortable.

  10. I was very excited to see your article today, Anita. These numbers are very encouraging and proof that the need for my industry (Virtual Assistance) is growing, as well as contributing to these numbers. Another label for your list is “micropreneur”.

    Lorri

  11. Anita, I just came across your site and I was pleasantly surprised by both the quality of articles and also on the quality of comments made by your viewership!

    Entrepreneurship is not a fad or a trend. It is in the nature of a significant proportion of the human species. The U.S. Census numbers (among others) back this up. The reason people take the step and spread their wings despite the much hyped (and inaccurately quantified) failure rate is clear. The need to be contribute (to the larger community) while maintaining individuality and independence is a basic inner drive and motivation!

    I learn’t this while pursuing a certificate in Entrepreneurship taught by two inveterate and brilliant scholar entrepreneurs… The Drs. Jim and JoAnn Carland. I found that the MBA that I had just completed had prepped me for the Corporate environment and not for the unique challenges of Entrepreneurship and/or the Single Person Business. While I initially continued in the Corporate Consulting route, I soon came to my senses and decided that (big) money did not equate to (big) satisfaction! Entrepreneurship is the way to go be it ‘small business’ or ‘single person’! However, in my experience, education in the tools and mindset of the entrepreneur is the single risk mitigating factor and should be considered seriously by any budding Entrepreneur who is serious about this lifestyle… because it is a lifestyle.

    I intend being vocal about the need of genuine and practical entrepreneurial education for budding entrepreneurs!

  12. I agree with Marie’s comment. It is a great way of life that I, personally, find very satisfying. It’s nice to see that it looks as if it will continue to grow and as a result, more opportunites will come of it.

  13. Well, as Friedman would say – “This is a flat world” and the little guy is now empowered through advancements in technology, namely communication. This is great stuff! I management several websites, including http://www.AllBuziness.com, and I make a significant income. Entrepreneurship is where it is at! Who does not agree?!

  14. As a matter of fact the term Small Business is not so accurate since the Small Business Administration of America considers a small business to be a company with 1-500 employees with less than 10 million dollars in yearly revenues except if they were in the transportation industry!

  15. Agree with John, having your own business is everyone’s dream and it looks like this will continue to grow…this is very encouraging.

  16. As pointed out by ‘CRM Software’ the term Small Business is too widely used to describe what in reality are several categories of businesses (as categorized by size). Size based categorizations have their inherent limitations when defining the nature of businesses. From what I have read in this list, most of the comments come from Microentrepreneurs! Read on

    A prominent school of thought in academe first posited by the Drs. Jim and JoAnn Carland (http://www.carlandacademy.com/) have defined businesses by the nature of the entrepreneurial drive of the entrepreneur. After much debate and analysis this definition has been widely accepted and used in research internationally. The terms ‘Microentrepreneur’, ‘Entrepreneur’ and ‘Macroentrepreneur’ as used to differentiate these different drives. The entrepreneurial drive as mentioned in this paragraph consists of the perceptions and motivations of the people who form these businesses. Macroentrepreneurs think big, wish to change the world and are extremely profit and growth focused. Microentrepreneurs think of independence, self sufficiency and they measure success by the personal freedom they achieve. Entrepreneurs exist in the vacuum in between. Once Entrepreneurs have achieved their profit and growth goals will fall back into the Microenturepreneur mode.

    Entrepreneurship is the backbone of the Economy and each of these types of entrepreneurs make up the Economy. All of us can identify the Macroentrepreneurs ex. Bill Gates, Henry Fords, etc.. some of us can name some Entrepreneurs people who run successful regional businesses but MOST OF US here ARE Microentrepreneurs! Microentrepreneurs constitute the majority of business owners and should be recognized as powerhouses of the economy!

  17. I plan on re-printing your whole post on my blog, with trackback credit. This makes personal brand marketing an extremely relevant current in the market.

    ~ Vik Rajan
    PersonalBrandMarketing.com

  18. Anita,

    Very timely article and graphic. I wrote a small post with a link to the article on my site.

    http://www.eversmall.com/index.php/one-person-businesses-on-the-rise/

    Thanks for the inspirational work here at Small Business Trends.

    – Mark

    eversmall.com

  19. Goodbye production-based economy, hello service based economy.

  20. Single person business owners have to wear several hats; therefore, they need to outsource some of those time-consuming tasks. Virtual Assistants provide this type of service. Virtual Assistants are single-person business owners also; therefore, they understand what it takes to operate a small business. For more information about virtual assistants or to find a virtual assistant to outsource those tasks to, visit Virtual Assistant Networking Association (VANA) at http://www.vanetworking.com.

    Rita Cartwright, Owner
    RJ’s Word Processing Services
    http://www.rjswordprocessing.com

  21. This makes sense. As a matter of fact, I personally have been one of these business owners for 20 years! Now I am doing consulting to help other businesses, start-ups and more with making money and being more profitable.

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