61.9 F
Los Angeles
Wednesday, Dec 6, 2023

Home Businesses Are Now Common

Nearly half of the 17 million small businesses in the United States were home-based, according to a recent report released by the Commerce Department’s Census Bureau.

Only 2 percent of these home-based businesses had $250,000 or more in receipts while 74 percent brought in less than $25,000. Most small business owners worked less than 40 hours a week and their businesses were not their primary source of income.

More than 14 million of the 17 million small businesses in the United States (82 percent) were owner-operated and had no paid employees.

Other highlights from the report include:

Most owners had prior work experience. More than half of the small business owners had 10 or more years of work experience before starting or acquiring their businesses, and half had a close relative who was a business owner.

Many owners were college educated. Thirty-five percent of the owners had at least a bachelor’s degree and 42 percent of the owners of service businesses had bachelor’s and/or professional degrees.

Capital commitments were modest. Fifty-seven percent of the owners started or acquired their businesses with less than $5,000 in capital and 25 percent required no capital. Only 19 percent used capital based on a personal loan.

Minority firms draw minority customers. Forty-four percent of African-American-owned businesses reported that more than half their customers were minorities; Hispanic-owned firms reported 33 percent; Asian and Pacific Islander, American Indian, and Alaska Native firms, 26 percent; and nonminority male firms, 9 percent.

Women-owned businesses hire proportionately more women. Thirty-five percent of women-owned employer firms reported 75 percent or more of their work force was female, compared to less than 24 percent of the nonminority male-owned firms.

The full report and tabulations show owner and business characteristics by race, ethnicity, gender, kind of business and legal form of organization for individual proprietorships, partnerships and subchapter S corporations (a subchapter S corporation is a special Internal Revenue Service designation for legally incorporated businesses with 35 or fewer shareholders who, because of tax advantages, elect to be taxed as individual shareholders rather than as corporations).

Mary Frauenfelder is with the US Department of Commerce.

Featured Articles

Related Articles