Number of U.S. Businesses Without Paid Employees Climbs for Third Straight Year

It may seem counter-intuitive to think that a business can run without employees, but when considering the number of self-employed Americans, the latter makes more sense. A recent report from the U.S. Census Bureau shows that the prevalence of these non-employer businesses reached 22.7 million in 2012, an increase of more than 1% from 2011. The Census Bureau Report details that this trend has been steadily gaining speed in the last three years.

The report includes a wide variety of industries including construction, manufacturing, and education, with the highest number of non-employer businesses based in technical services. Other popular sole proprietary business areas include health care, and real estate, leasing and rental companies. More than 400 industries in the report showed growth in this sector, and Florida, California, and New York added the most non-employer businesses of all states in the U.S. The increase in these businesses also generated $1 trillion in total revenue for 2012, which accounts for more than a $40 billion boost from the previous year.

Several cities have mirrored this report, listing their growth in the non-employer sector. In Albuquerque, New Mexico, these firms grew by more than 400, raising the city’s revenue .02%. Albuquerque also matched the national trend, with more technical service businesses, and real estate rental and leasing companies established during 2012 than 2011. Cayuga County in New York also saw a .95% increase in these businesses, close to the national 1.1% expansion. The county also experienced its highest revenue from non-employer businesses at $158.83 million in 2012.

But even with the significant rise in revenue in counties and cities across America, non-employer businesses are not the highest grossing sector. The Census Report explains that the majority of businesses in the U.S. are sole proprietorships, but they produce less than 4% of the total sales and business receipts in the nation. Additionally, the U.S. Census Bureau typically excludes non-employer business statistics from its regular business report because of their low impact on the nation’s economy.

One of the reasons for this could be the fact that there are a large number of mom-and-pop restaurants and stores that do not contribute a significant amount of profits to the nation’s revenue. In addition, these smaller businesses do not always seek accreditation from national and international agencies, which may render them invisible to a larger public audience. The International Organization for Standardization (ISO) has several certifications that it offers to all businesses in order to gain international certification for following best practices.

These certifications range from quality management to food safety management to social responsibility. With an ISO certification, businesses can raise their level of quality and visibility, and promote their certifications as a sign of high quality products and services. Accreditation from the ISO is becoming increasingly important as more businesses are making compliance with these standards a prerequisite for conducting business transactions with both domestic and international corporations.

Having an ISO certification could help garner more profits for non-employer companies that do not already have a sizable customer base. It may not spark enough revenue to overshadow employee-based company success, but it will help to raise the nation’s overall profits, and foster a more global market.

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