Half of U.S. Businesses Are Home-Based, Majority of Firms Self-Financed, Census Bureau Reports
Almost half (49%) of the nation’s businesses are operated from home, and more than 6-in-10 owners used their own money to start the business, according to new U.S. Census Bureau reports on characteristics of businesses and business owners.Industries with the most home-based firms: 2002
Two reports released today are from the 2002 Survey of Business Owners (SBO):
Characteristics of Businesses: 2002 & Characteristics of Business Owners: 2002.
The data show self-employed individuals who have no paid employees operate three-fourths of U.S. businesses.
Home-based businesses
- Home-based businesses made up 56 percent of American Indian- and Alaska Native-owned firms, 56 percent of women-owned firms, 53 percent of black-owned firms, 53 percent of Native Hawaiian- and Pacific Islander-owned firms, and 45 percent of Hispanic-owned firms. In contrast, 2-in-3 Asian-owned firms reported they conducted business from nonresidential locations.
- Top industries for home-based businesses were: professional, scientific and technical services, construction, and retail trade and other services (such as personal services, and repair and maintenance).
- People using their own money or family assets for business startups included 77 percent for businesses with paid employees and 59 percent for businesses with no paid employees.
- Top industries for these “self-made” businesses were: accommodation and food services (79 percent), manufacturing (78 percent), wholesale trade (74 percent) and retail trade (72 percent).
- Nearly 3-in-10 (28 percent) of all entrepreneurs started or acquired their business with no capital at all.
- Nearly 1-in-10 U.S. businesses both employer firms and nonemployer firms were started by owners who used personal or business credit cards to finance the startup or acquisition.
- In 2002, 64 percent of business owners had at least some college education at the time they started or acquired ownership in their business, 23 percent had a bachelor’s degree and 17 percent had a graduate degree. Just over 1-in-4 owners had a high school education or less.
- Thirty-one percent of owners were more than 55 years of age, 29 percent were between 45 and 54, and 24 percent were between 35 and 44. Only 2 percent of owners were less than 25 years of age.
- Fourteen percent of business owners in 2002 were veterans; 73 percent of those operated with no paid employees. Nearly 7 percent of veteran business owners were disabled as a result of injury incurred or aggravated during active military service.
- When it comes to depending upon a business for income, 70 percent of owners of employer firms reported that their business is their primary source of income, compared to 44 percent of nonemployer firms.
- More than half of business owners reported their primary function was managing day-to-day operations and producing their business goods and services.
- When it comes to putting in long hours, more than half the owners of firms with paid employees reported working overtime (more than 40 hours a week, on average). Only 26 percent of owners of nonemployer firms reported they worked overtime. In fact, 43 percent of owners of nonemployer firms reported working less than 20 hours a week on average, compared to 20 percent of owners of firms with employees.