The U.S. economy is seeing a significant rise in “nonemployer” firms, businesses that have no employees other than their owners, which are achieving annual revenues of $1 million or more. In 2017, there were 36,984 such firms generating between $1 million and $2.49 million, a 38% increase from 26,744 in 2011. This trend extends to even higher earners, with 2,229 nonemployer firms bringing in $2.5 million to $4.99 million in 2017, and 356 generating $5 million or more.
This growth in million-dollar, one-person businesses is attributed to several factors. The proliferation of free and automated digital tools, along with the expansion of online platforms that simplify hiring contractors, plays a crucial role. Entrepreneurs are also increasingly choosing to operate ultra-lean businesses, opting to outsource functions like billing rather than hiring full-time employees, which in turn supports the growth of their contractors and outsourced providers. Changing entrepreneurial attitudes also contribute to this shift.
Many more solo businesses are approaching the million-dollar threshold. In 2017, 282,819 firms generated $500,000 to $999,000, and another 629,837 brought in $250,000 to $499,999. These successful solo enterprises span various industries, including professional services, construction, real estate, retail, healthcare, social services, and finance. Some entrepreneurs are even reaching the million-dollar mark within three to five years of starting their business, often with minimal initial investment, such as Rajesh Srivastava who started priceSeries for less than $1,000 to sell trading software.
