NEWSRELEASE
For Release: May 31, 2006 Homebased Sole Proprietors Generate $102 Billion New Study Details Homebased Business Revenue, Income By
Industry WASHINGTON, D.C. - America’s homebased sole proprietors generate $102 billion
in annual revenue, according to a study released today by the Office of Advocacy
of the U.S. Small Business Administration. The study details revenues, expenses,
and income for both homebased and non-homebased sole proprietors by industrial
sector. “Sole proprietorships are a vital part of our economy,” said Thomas M.
Sullivan, Chief Counsel for Advocacy. “Many are homebased 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 homebased and non-homebased sole
proprietorships. For example, it finds that the average homebased sole
proprietor earned $22,569 in net income while their non-homebased counterparts
earned $38,243. Due to lower expenses, particularly in rent and labor costs, the
average homebased sole proprietor consistently gained a higher return on gross
revenues at 36 percent, versus 21 percent for the non-homebased. The report also finds that the percent of homebased sole proprietorships was
greatest in the Administrative, Support, and Waste Management; Information; and
Construction sectors. For the non-homebased, the percentage was greatest in the
Accommodation and Food Services; All Other Services; and Finance and Insurance
sectors. The Office of Advocacy, the “small business watchdog” of the government,
examines the role and status of small business in the economy and independently
represents the views of small business to federal agencies, Congress, and the
President. It is the source for small business statistics presented in
user-friendly formats and it funds research into small business issues. For more information and a complete copy of the report, visit the Office of
Advocacy website at
www.sba.gov/advo. ### The Office of Advocacy of the U.S. Small Business
Administration (SBA) is an independent voice for small business within the
federal government. The presidentially appointed Chief Counsel for Advocacy
advances the views, concerns, and interests of small business before Congress,
the White House, federal agencies, federal courts, and state policy makers. For
more information, visit
Contact: John McDowell, (202) 205-6941
john.mcdowell@sba.gov
SBA Number: 06-14 ADVO
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