- Thousands more independent business owners have achieved millions of dollars in revenue and are likely to continue to grow.
- From 2020 to 2021, the number of such companies increased from 47,000 to 58,000 due to the pandemic.
- Professional, scientific and technical services were the most prevalent, followed by construction and finance.
Thousands of self-employed businesses have reached the coveted $1 million revenue threshold, and that number is likely to continue to grow.
A Business Insider analysis of nonemployer businesses (those that are run solely by the owner and have no other paid employees) found that the number of nonemployer businesses with revenues of $1 million or more jumped from just under 47,000 to nearly 58,000 from 2020 to 2021. The 2021 figures are the latest available from the US Census Bureau.
The number has risen steadily since it was about 31,800 when the Census Bureau began tracking it in 2012. The increase from 2020 to 2021 marks the largest year-over-year increase since 2012.
According to 2021 data, the professional, scientific and technical services sector is the sector where entrepreneurs have been most successful in growing their businesses to sales of over $1 million. Of the 14,450 millionaire businesses in this sector, 874 have revenues of over $2.5 million. Millionaire businesses represent 0.38% of all private businesses in this sector.
Construction ranks second with just over 6,600 companies, of which 211 have revenues exceeding $2.5 million. Millionaire companies in the construction industry make up 0.24% of all private construction companies. Finance and insurance follows with about 6,450 companies, of which 623 have revenues exceeding $5 million. This sector has the highest percentage of millionaire companies, at 0.85%.
Other top industries include retail trade, real estate, transportation and warehousing, and wholesale trade, while utilities, mining, and manufacturing rank lowest among companies with billionaires.
Small business creation has been on the rise during the pandemic. As more Americans leave their nine-to-five jobs to start their own businesses in the age of hybrid work, many are looking to grow everything from clothing brands to independent financial services companies to “sweat startups” like lawn care and self-storage businesses.
“If you look at who the really wealthy people are in these towns, who they’re eating at fancy restaurants or hanging out at fancy country clubs, you’ll see that they actually didn’t have any new ideas,” Nick Huber, founder of the Sweaty Startup movement and owner of nine companies, told BI. “They didn’t have high-tech startups that were trying to change the world, and they didn’t build billion-dollar businesses. Most of them were just doing mundane or boring things, but they were doing them exceptionally well.”
The Census Bureau estimates that there are currently about 28.5 million non-employer businesses in the U.S., a figure that has skyrocketed during the pandemic.
The total number of monthly business applications has increased from approximately 300,000 in February 2020 to a consistent low to mid 400,000 range in recent years, peaking at nearly 546,000 in July 2020. Since March 2020, the number of new applications has reached just under 22 million.
Have you started a business that is doing financially well? Contact this reporter. nsheidlower@businessinsider.com.
