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Jobless Entrepreneurship

During the Great Recession, more Americans have become entrepreneurs than at any time in the past 15 years. However, while the economy and its high unemployment rates may have pressed more individuals into business ownership, most of them are going it alone, rather than starting companies that employ others. So says the Kauffman Index of Entrepreneurial Activity, published March 7, 2011.

According to the study, 0.34 percent of American adults created a business per month in 2010, or 565,000 new businesses, a rate that remained consistent with 2009 and represents the highest level of entrepreneurship over the past decade and a half.

Carl Schramm, president and CEO of the Kauffman Foundation says, “Far too many founders are choosing jobless entrepreneurship, preferring to remain self-employed or to avoid assuming the economic responsibility of hiring employees. This trend, if it continues, could have both short- and long-term impacts on economic growth and job creation.”

Solopreneurs are no so solo as all that. They need suppliers, subcontractors and services, which of course they buy–from others, including other solopreneurs. If they are successful as solopreneurs, their venture will flourish and chances are high that they will hire later. This is parrticularly the case where a solopreneur is making something, rather than supplying services.

A service provider will reach capacity quite quickly. Once all their hours are booked, they can sell no more. But even they may resort to hiring others as independent contractors. Producer ventures are most frequently founded by creative people and once their products are designed then production can replicate them in volume, thus creating a need for more hands.

PLEASE NOTE: There is tons of useful stuff on Startup Owl, a site that’s been going for a dozen years. So keep browsing, but know that the founder, Will, now devotes most of his time and energy to his new website that you should definitely visit:

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