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Idea of the Day

January 23, 2010

Nonemployer startups

Census Bureau figures for 2006 showed that there were 21 million nonemployer businesses (defined as firms with business receipts of at least $1,000 but no paid employees) and 6 million employer businesses. A recent report on nonemployer start-ups from the SBA's Office of Advocacy shows a lot about business in the U.S. Firms with no employees account for three-quarters of all U.S. businesses, yet produce only 3% of business receipts. However, while they account for only a small share of the economy, they are a "gateway to becoming employer firms, providing flexible work opportunities and a path to economic prosperity." The start-up rate for nonemployer firms is three times the rate for employer firms.

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