According to new data released by the U.S. Census, the number of personal businesses - whicy are single person businesses with no employees - increased by close to 1 million in 2007 reaching 21.7 million. This is an increase of 4.5% over 20.8 million personal businesses recorded in 2006.
This increases the total number of U.S. small businesses (defined as less than 500 employees) to roughly 28 million.
Personal business total receipts (roughly equivalent to revenue) grew 2.2% to $992 billion. This means personal businesses generated about 7.5% of America's economic activity in 2007. The average personal business had about $46,000 in receipts in 2007.
The personal business category includes freelancers, independent contractors and other forms of self-employment. The Census derives this data from tax returns. This number includes full time and part-time personal businesses. The Census calls this group "nonemployer businessess."
The number of personal businesses has been growing steadily since the late 90's when the Census first started collecting this data.
We are forecasting that this growth will continue over the next few years due to lower personal business start-up costs, lower relative risk associated with starting a personal business and the economic downturn reducing traditional employment options.
Longer term we see multiple structural shifts driving the growth of personal businesses. We cover this in more detail in our Changing Faces of Entrepreneurship research report and in our personal business and self-employed blog categories.
