Commercial PropertyThe eBay Effect: Self-employed Figures Rise Mostly Due To Internet
A daily average of 2,356 people went into business for themselves in 2005, according to the latest figures compiled by the U.S. Census Bureau, bringing the number of businesses without a payroll to 20.4 million. The figures do not include self-employed business people who have employees.
According to Nonemployer Statistics: 2005, the addition of 860,000 firms "where an owner ventures outside the typical business culture of bosses and employees" increased 4.4 percent over a one-year period. Businesses without paid employees, known in the business industry as "lone wolves," had receipts of $951 billion and make up approximately 78 percent of the nation’s 26 million-plus firms.
Call it the eBay Effect.
Among the fastest-growing industries are Web search portals (41.2 percent) and Internet service providers (16.6 percent), along with nail salons (18 percent), electronic shopping and mail-order houses (12 percent), recreational vehicle dealers (12.1 percent) and landscaping services (11.1 percent).
The District of Columbia led the nation in the growth of these small businesses with a 9.6 percent increase between 2004 and 2005, followed by Nevada at 7.7 percent and Florida with a 7.6 percent growth rate.
Lawrence Yun, senior economist for the National Association of Realtors, says that membership has been "sticky." He says there are 1.34 million members as opposed to 1.31 million a year ago in May.
Other highlights of the report:
There were 2,441,600 real estate sales and leasing firms in 2005.
Georgia and Utah had increases of 7.6 percent and 7.2 percent, respectively, to round out the top five states in the growth of self-employed business people.
The District of Columbia led the nation in receipts with a gain of 15.5 percent.
Among the nation’s most populous counties, Los Angeles County, Calif., had 799,108 nonemployer businesses, with Cook County, Ill., second at 380,457. Miami-Dade, Fla., followed at 296,456.
Counties with increases in nonemployer business growth included Orange County, Fla. (9.4 percent); Clark County, Nev. (9 percent); Miami-Dade (8.6 percent); Tarrant County, Texas (8.4 percent); Gwinnett, Ga. (8.4 percent); and Hillsborough, Fla., and Mecklenburg, N.C. (both at 8.3 percent)
The report has data on 17.7 million individual proprietorships, more than 1.3 million corporations and 1.3 million partnerships. Nonemployer firms may be run by one or more individuals and can range from home-based businesses to corner stores or construction contractors. These firms are often part-time ventures with owners operating more than one business.
The Census Bureau says its numbers may be understated because areas devastated by Hurricane Katrina in 2005 were granted additional time by the Internal Revenue Service to file tax returns. Also, certain businesses were excluded because of few or too high receipts.