Fed up with rising labor costs, a new generation of entrepreneurs is launching millions of tiny companies differing from business in the past: They don’t want employees.
The trend, building since the late 1990s, hit a milestone this year when the number of these microbusinesses reached 20 million – one for every six private-sector workers, a new analysis of government data shows.
Last year, Lisa and Mark Solomon started The Billable Hour, (featured here on December 10th) a specialty wristwatch and greeting card maker and retailer, from their home near New York City. They rely on a far-flung network to produce their goods: A graphic artist in Utah, a watch designer outside New York City, a San Diego cartoonist, a website technician in Buffalo.
Like many microbusinesses, Billable Hour is a part-time venture for Lisa, 38, and Mark, 48, attorneys with two young children. Depending on holiday sales, they hope to turn their first profit this year. “We’re both professionals, but it’s nice to have another income stream,” Lisa says.
Near Nashville, Mary Ferrin expects to sell $150,000 in party games this year, a 50% jump from 2005. She outsources work to other entrepreneurs in Greece and Canada.
Microbusinesses’ receipts rose to $887 billion in 2004, the most recent available; 7% annual growth puts it on track for $1 trillion in sales this year.
Photo by Todd Plitt, USA TODAY.