Monday, March 14, 2005

In Solano County, there were 17,151 businesses run solely by their owners in 2000

Article Last Updated: Saturday, Mar 12, 2005 - 11:07:26 pm PST

Working from the comfort of home

By Matthew Bunk

FAIRFIELD - When Eleanor Benjamin ran an interior decorating business in the Philippines during the early 1980s, she had seven workers on her payroll and a large commercial building that drew customers from far away.

She saved her profits for years in hopes of one day moving herself and the business to California. When the time came and she had stashed away enough money, Benjamin and her brother invested everything they had to start a small shop in Vallejo, where they made window coverings and offered design tips to fashion-savvy clients.

It wasn't long before they realized they would never have a staff as large as the one Benjamin had the Philippines. The difficulty of paying American wages and California rents were too much for a small business to bear.

Now Benjamin runs the interior design business out of her Green Valley home. She and her husband are the only employees.

Though the Benjamins make a comfortable living, the business doesn't generate enough money to pay a large staff or to rent commercial space downtown.

The first lesson of running a home-based business, Benjamin said, was that "you do everything yourself." But now that she's used to running the business out of her detached garage, Benjamin wouldn't have it any other way.

"I don't want to have a big commercial area," she said. "I like it just how it is."

She isn't the only one. Small, home-based businesses have been popping up in record numbers all across the U.S. - and Solano County is no exception.

More than 17.9 million Americans work for themselves, according to a Census Bureau study that found the number of small firms without employees rose 3.9 percent in 2002.

California led all other states with more than 2.5 million non-employee businesses and was way ahead of second-place Texas and third-place New York. Those states combined for about 2.7 million businesses without employees.

In Solano County, there were 17,151 businesses run solely by their owners, according to Census figures from 2000, the most recent county data. That's about three times the number of businesses with employees, according to data compiled a year later.

In the past couple of years, the number of single-person businesses seems to have jumped even higher, said Chuck Eason, director of the Small Business Development Center at Solano Community College. Although the category of single-person businesses doesn't necessarily mean it's home-based, many of them are, he said.

"Hiring that first employee is a big step, and some home-based businesses don't want to grow," he said. "There's a lot of advantages to running a business from your home. For example, you can start slow and keep your overhead costs down."

Nationally, these small businesses make up more than 70 percent of all businesses. They may be run by one or more individuals, can range from home-based businesses to corner stores or construction contractors and often are part-time ventures with owners operating more than one business at a time.

Many firms of this type were in real estate and property management, as well as construction and professional business services. Segments with the largest growth from 2001 to 2002 include landscaping services (21.5 percent), janitorial services (20.4 percent), nail salons (8.7 percent), real estate agents (7.1 percent), child-care providers (5.9 percent) and beauty salons (5.6 percent), according to the Census Bureau.

Some experts indicated growth in owner-operated small businesses was a positive trend showing Americans' entrepreneurial spirit.

Other observers felt it might have resulted from a downturn in the jobs market and didn't necessarily reflect a trend toward business creation.

"A lot of people were being laid off as a result of the dot-com bust, and out of frustration went into business for themselves," said Michael Shaw, assistant state director for the National Federation of Independent Businesses.

In 2002, the 17.6 million non-employer businesses combined for gross receipts of $770 billion, or roughly $44,000 each. That average was slightly higher in the Bay Area, $54,621, and California, $50,672, according to reports.

But not all solo businesses succeed, Eason said. Many times, the cost of health insurance drives small business owners back to salaried employment.

In some cases, the decision to start their own business was only a temporary fix until the job market improved, Shaw said.

"One thing that drove the spurt was that people came out of these tech jobs and decided to wait it out by starting their own business or to work as consultants until they got their jobs back," he said.

"That trend may have slowed a little bit with the increased hiring across the nation. But in California, where we're still losing jobs, I think we'll continue to see that type of small business growth."

Reach Matthew Bunk at 425-4646 Ext. 267 or

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