It used to be hiring employees was the goal of almost all small business owners. This is no longer true.
As the Your Story article Running an employee-free business without compromising on scale and quality points out, you no longer need traditional employees to start and scale a small business.
With the emergence of workflow automation, machine learning (or artificial intelligence), talent marketplaces, collaboration tools, and a curated network of independent operators, you can be one person, sitting at home in your pyjamas, doing the work of a hundred people and making more than just decent money each year, legitimately and efficiently. There are numerous examples of these pyjama-wearing, globe-trotting multi-millionaires out there.
Elaine Pofeldt's Forbes article Want To Create A $1 Million E-commerce Store? This Community Aims To Get You Past The Finish Line provides more examples of employee free businesses.
Her article describes a community of over 1000 micro ecommerce companies with each member generating $250,000 or more in revenue. The majority of these firms are solopreneur businesses.
We've been tracking these "employee free" businesses for the past 5 years through the MBO Partners State of Independence in America study series. In 2016 we found that there are about 5.4 million U.S. solopreneur businesses that use contract labor instead of hiring traditional employees.
We also found they spent about $95 billion hiring other independents over the past year. This is the equivalent of hiring about 2.3 million full-time workers.
Interestingly enough, these businesses are not considered "employer businesses" and not included in most government statistics on U.S. small businesses. Instead, they are counted as "non-employer businesses" and excluded from most studies on entrepreneurship and small business growth.
We, of course, think this is a major mistake.
This is because by not recognizing that more firms are going the employee free route, many studies are finding entrepreneurship in America is declining.
The Washington Post's The decline of American entrepreneurship — in five charts is a good example of this type of thinking.
Because of our work tracking these solopreneur firms, our view is entrepreneurship is not in decline in America. Just the opposite, we believe entrepreneurship is the strongest it's been in the past few decades.
We'll have more on this topic in the coming months.