LANSING – America’s home based sole proprietors generate $102 billion in annual revenue, according to a study released by the Office of Advocacy of the U.S. Small Business Administration and published by the Small Business Association of Michigan.
The study details revenues, expenses, and income for both home based and non-home based sole proprietors by industrial sector.
?Sole proprietorships are a vital part of our economy,? said Thomas M. Sullivan, Chief Counsel for Advocacy. ?Many are home based micro businesses; collectively they generate a significant amount of economic activity. For the average sole proprietor, their business provides benefits of entrepreneurship that go beyond just income and revenue.?
Written by Joanne H. Pratt with funding from the Office of Advocacy, The Impact of Location on Net Income: A Comparison of Homebased and Non- Homebased Sole Proprietors examines federal income tax data from year 2002 sole proprietorship returns (Schedule C).
The report presents a comparison of home based and non-home based sole proprietorships. For example, it finds that the average home based sole proprietor earned $22,569 in net income while their non-home based counterparts earned $38,243. Due to lower expenses, particularly in rent and labor costs, the average home based sole proprietor consistently gained a higher return on gross revenues at 36 percent, versus 21 percent for the non-home based.
The report also finds that the percent of home based sole proprietorships was greatest in the Administrative, Support, and Waste Management; Information; and Construction sectors. For the non-home based, the percentage was greatest in the Accommodation and Food Services; All Other Services; and Finance and Insurance sectors.
To read the report, click on SBA.Gov
