- Thousands more one-person businesses are hitting million-dollar revenues and may keep growing.
- From 2020 to 2021, the number of such businesses grew from 47,000 to 58,000, driven by the pandemic.
- Professional, scientific, and technical services led, followed by construction and finance.
Thousands more one-person businesses are reaching the coveted million-dollar earnings number — and it may continue to rise.
A Business Insider analysis of nonemployer businesses — those that are run solely by their owners with no other paid employees — found that between 2020 and 2021, the number of nonemployer businesses with revenues of at least $1,000,000 skyrocketed from just under 47,000 to nearly 58,000. The 2021 numbers are the most recent from the US Census Bureau.
This number had been steadily increasing since the Census Bureau started tracking it in 2012, when it was about 31,800. The 2020 to 2021 increase was the largest year-over-year increase since 2012.
The 2021 data suggests the professional, scientific, and technical services sector is where entrepreneurs have had the most success growing their businesses to over a million in sales. Of the 14,450 millionaire businesses in this sector, 874 have revenues over $2.5 million. Millionaire businesses make up 0.38% of all one-person businesses in this sector.
Construction ranked second with just over 6,600 businesses, of which 211 had revenues above $2.5 million. Millionaire businesses in construction made up 0.24% of total one-person construction businesses. Finance and insurance were close behind with about 6,450, of which 623 had revenues over $5 million. This sector had the highest percentage of millionaire businesses at 0.85%.
Other top industries included retail trade, real estate, transportation and warehousing, and wholesale trade. On the flip side, utilities, mining, and manufacturing ranked lowest for millionaire businesses.
Small business creation has been on the rise throughout the pandemic. As more Americans leave their 9-to-5 jobs to start their own businesses in the age of hybrid work, many are looking to grow everything from clothing lines to independent financial service companies to "sweaty startups" like lawncare or self-storage.
"If you look at who is truly wealthy in these towns, people who are eating at the nice restaurants, people who are at the nice country clubs, you'll find that they actually didn't have new ideas at all," said Nick Huber, who launched the "sweaty startups" movement and owns nine companies, told BI. "They didn't have tech startups that were aimed at changing the world, and they didn't build a billion-dollar business. Most of them did something common or boring, and they just did it uncommonly well."
The Census Bureau estimates there are now almost 28.5 million nonemployer businesses in the US, which has shot up during the pandemic.
The number of total monthly business applications grew from about 300,000 in February 2020 to consistently in the low- to mid-400,000s over the last few years, peaking with almost 546,000 in July 2020. Since March 2020, this has amounted to just under 22 million new applications.
Have you started a business that has been doing well financially? Reach out to this reporter at [email protected].