Employment by the Self Employed

If you are looking for a job working for someone in business for him or herself, focus on the incorporated self-employed. While only a fraction of self-employed people employ anyone else, those whose company is incorporated are much more likely to have employees than those whose business is unincorporated.

Moreover, the unincorporated self-employed are much more likely than the incorporated self-employed to run micro enterprises. According to Bureau of Labor Statistics (BLS) data, 95.2 percent of people in business for themselves who have not incorporated have fewer than ten employees as compared to only 80.1 percent of those who have incorporated.

The gap in the odds of having a “medium-sized” small businesses is even higher. As the figure below shows, 17.2 percent of incorporated self-employed people have 10 to 99 employees, but only 3 percent of the unincorporated self-employed do.

Strangely, the gap shrinks for “large” small businesses. According to the BLS estimates, 2.7 percent of the incorporated self employed have 100 or more workers, as compared to 1.9 percent of the unincorporated self-employed.

Fraction of Self-employed People with Different Numbers of Employees:

Source: Created from Bureau of Labor Statistics data, courtesy of Steve Hipple

Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.