Most one-person businesses struggle

The majority of small business owners who work solo struggle to make their companies profitable. That’s one of the findings of a report released last week by the Federal Reserve Bank of New York that gave a snapshot of non-employer firms, those that have no employees other than the sole proprietor. The report also found that nearly twothirds of these owners depend on their businesses as a primary source of their income, but nearly three-quarters have no more than $100,000 in annual revenue.

The report was compiled from a survey of more than 5,800 business owners across the country in the second half of 2018; they included people who have companies that produce goods and services as well as those who are freelancers and those who had jobs but ran a business to provide them with supplemental income. One out of five owners surveyed said they started or bought a business because they couldn’t find work elsewhere.

The report found that running a business is a struggle for many owners. Nearly half said they had outstanding debt. One of the challenges the owners face is rising costs; 53% reported their expenses had increased but only a third said they were passing costs along to clients or customers — a sign that small businesses remain under competitive pressures a decade after the end of the Great Recession.

While nearly three-quarters hope to expand their businesses in the next 12 months, nearly 60% expect their revenue to grow. Not surprisingly, nearly all of early-stage companies expect their revenue to increase — new entrepreneurs are often the most optimistic of business owners.

RICHARD VOGEL / ASSOCIATED PRESS Los Angeles office workers line up for lunch at food trucks. The majority of small business owners who work solo struggle to make their companies profitable.