Home-Based Sole Proprietors Generate $102 Billion in Revenue

Inc.:

Home-based sole proprietors generate $102 billion in combined annual revenue, and their ranks are expected keep growing, according to a new study by the Small Business Administration’s Office of Advocacy.

While home-based sole proprietors bring in almost $15,700 less on average than their non-home-based counterparts — $22,569 in net income versus $38,243 — they earn a higher return on gross revenues because of lower overhead costs.

The study examined 2002 federal income tax data from sole proprietors who deducted home-office expenses. The study does not include firms that opt not to take the home-office deduction or those that deduct for both a home office and rent. However, if such businesses were included, “the total annual revenue may be over $500 billion,” said Joanne H. Pratt, a small-business consultant and researcher who authored the study.

Photo by sarahhatter.

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