Million-Dollar, One-Person Businesses on the Rise: Who Is Creating Them? - Black Economic Development.com
Home Economics Million-Dollar, One-Person Businesses on the Rise: Who Is Creating Them?
One of the most exciting trends in the small business world is the growth of million-dollar, one-person businesses.
The U.S. Census Bureau groups these businesses under the rubric of nonemployer firms—businesses with zero employees on payroll. Many do have help of some sort and use contractors, automation and outsourcing to get more done than one person can usually accomplish.
The majority of these firms are one-person operations, but in some cases, the businesses are partnerships or have small teams of founders. One example is Vital Pet Life, an ecommerce store run by Donie and Kyle Yamamoto to sell an Alaskan salmon oil supplement for pets. Others include Nomad Lane, a maker of travel gear and handbags, and Rich Girl Collective, which teaches women how to run their own businesses.
The Census Bureau recently changed how it is collecting data on nonemployer firms and made it easier to see which demographic groups are creating these businesses. One thing that quickly becomes clear is that this is a very inclusive sector, compared to venture-backed startups, where the percentage of funding going to women- and minority-owned firms is tiny.
Among the 40,000 nonemployer firms breaking $1 million, the government found that 6,900 are minority-owned firms and 5,100 are owned by women.
Here is some more detail on the demographic groups represented in the 40,000:
American Indian/Alaska native business owners: 60
Asian business owners: 8,500
Black or African American business owners: 1,100
Hispanic business owners: 3,000
Native Hawaiian or other Pacific Islander business owners: 40
Veterans (overlaps with other demographic categories): 1,800.
These numbers are very small, to be sure, but now that the data is easier to surface and study, perhaps we’ll see more leaders paying attention to the potential that these businesses have.
However, what we still don’t know is exactly what is making these businesses so much more financially successful than others of the same size in their industry. For instance, do they have more access to capital than other businesses that don’t grow as much? Understanding what differentiates them could potentially lead to programs that would allow others to follow suit.
Only time will tell if the numbers of million-dollar, one-person businesses will keep climbing but with business registrations increasing at a record pace, it does look like we’ll see more successes, too. It will be very helpful to have more robust Census data to track them going forward.
Tags: African AmericanblackBlack owned businessentrepreneurmillion dollar business startupswork your side hustle