Wednesday, 27 June 2018

The Number of Nonemployer Businesses Continued to Grow in 2016

The U.S. Census recently released the 2016 nonemployer business statistics. Key quote from their press release:

... nonemployer establishments increased 2.0 percent from 24,331,403 in 2015 to 24,813,048 in 2016. Receipts increased 1.5 percent from $1.15 trillion in 2015 to $1.17 trillion in 2016.

This continues a pattern of about 2% growth per year in the number of nonemployer businesses over the past couple of decades. Since 2003, for example, the number of nonemployer businesses has increased by about 5.7 million. 

Nonemployer businesses are businesses that have a business owner, but no traditional full or part-time (W2) employees. The average nonemployer business is small and likely a part-time business - the median nonemployer falls into the $10,000 to $24,999 gross receipts bracket. 

But one of the fastest growing segments of nonemployers are those reporting $100k or more in gross receipts. As the chart below shows, this segment grew from 2.2 million in 2010 to about 2.8 million in 2016, or about 27%.  This is almost twice the overall growth rate for nonemployer businesses during this period.

2016 high earning nonemployers

This data echos the findings from the MBO Partners State of Independence study series, which also shows strong growth in the number of independent workers reporting earnings of $100k or more.

The strong economy is creating more opportunities for solopreneurs of all kinds - and especially highly skilled solopreneurs - to win more business and also increase their prices. We expect to see more growth in nonemployers in general and the high earning segment in particular. 

Emergent Research (that's us) contributes to the MBO Partners State of Independence study series.



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