"When entrepreneurs list their principal reasons for launching a company, small business owners often cite being their own boss, flexibility in setting their working hours, and turning a commercial concept into reality as their main motivations. Now, new data identifies another incentive that may convince future entrepreneurs to take the plunge. According to a recent analysis by the Federal Reserve Bank of Minneapolis, the average self-employed person earns significantly more income during their career than people who work for someone else."
"To establish a more complete picture of the nation's entrepreneurs, the Minneapolis Fed used U.S. tax and Social Security Administration data from 2000 to 2015. That allowed it to determine the income those small business owners collectively generated for themselves, and identify why they stuck it out with companies that were often slow to reach profitability. And that wasn't due to setting their own hours."
Self-employed individuals earn significantly more income over their careers than comparable paid employees and show steeper income growth trajectories. Income among small business owners varies widely, with many businesses taking several years to reach strong profitability. Many surveys produce contrasting results because they sample different subsets of entrepreneurs and miss the full income picture. Administrative U.S. tax and Social Security data from 2000 to 2015 capture lifetime earnings and collective income generation more completely. Small business owners often persist through slow early earnings for the prospect of higher long-term financial returns rather than for scheduling flexibility.
Read at Fast Company
Unable to calculate read time
Collection
[
|
...
]