Since it’s July, I thought I would work with the not-exactly-original-but-often-interesting theme of “independence.”

When it comes to running a microbusiness, independence can mean several different things.

Of course, it’s a pretty rare thing for a microbusiness to be a wholly owned subsidiary of anything at all, so that we are all independent in that sense.

It’s nice, too, because we can make business decisions without having to worry about other forces in the corporate hierarchy that might be breathing down our necks.

But sometimes being small makes being independent — truly independent– impossible.

For example, if you run a micro service business and you only have one or two clients, you really do have to treat each of them like the Goose That Laid The Golden Egg. If you end up having to be paranoid about ticking off one or the other of them because you can’t afford to lose the business … well, that’s not really independent, is it?

How about if you find that your business is always buffeted by the winds of the larger economy. Maybe your business decisions try to ignore that larger economy but, if it still impacts your business, can you truly call yourself independent?

Or maybe you really are independent. Or maybe you are but don’t want to be and are only waiting for the job market to revive.

That’s my question to you this month:

What do you say?

While you’re at it, feel free to drop by the comments here and leave your general thoughts about the whole idea of being an independent business and what that really means and why it’s important … or not.

June’s Poll Results

This is another case in which the results were interesting and would have been even more so if there’d been more responses.

Juen Poll: Has the economy caused you to reassess your business?

Of course! – 50%
No, I regularly revise my business plan (regardless of what the economy does) – 30%
No, it hasn’t been necessary – 20%

There were no votes for the fourth choice: “No, I never go back and revise anything.”

It isn’t surprising to learn that microbusiness owners regularly reassess their firms, even though we are pretty sure that microbusiness owners are allergic to excess paperwork. Micros are pretty flexible and, as has often been stated, they can turn on a dime.

Under those circumstances, they had better be willing to get with the planning program. Otherwise, they’d be spinning like tops and stopping on dimes and getting precisely nowhere, wouldn’t they?

Have a great weekend, everybody!

(Photo by trmarch, via Flickr)

I originally had other plans for today’s post but I got an email over the long weekend that changed my mind.

The email was from Trish, of SENSSE, who wrote in part:

Hi Dawn,

I appreciate your columns and podcasts and especially your dedication to collecting figures. I do have a question though and seemed to have missed where it’s spelled out.

Jobs- How many? That’s where the public, lending institutions and economic developers of every level ask. How many jobs are we talking about?

I got this: Microbusiness at 27M make up 92% of all firms. About 21M of those are ‘non-employer’. But what about jobs? What number and percentage of jobs do microbusinesses hold and which definition of microbuisness (solo, 5 and under, 10 and under etc.)

Well, I thought that was an interesting question.

The thing about microbusinesses and jobs is that it’s not a simple question of ‘how many jobs to they create? how many people do they hire?’

But before I get into that, let me do the easy stuff.

For starters, everything I write here will refer to microbusinesses with fewer than five employees. Obviously, when you look at job creation in this group, you are immediately excluding 85% of them because that’s the percentage of microbusinesses that don’t create traditional jobs, being nonemployers.

So, among the 3.7 million microbusiness employers (and this is still 61% of all U.S. employers), there are 6.1 million employees. That is a fairly small percentage of the overall workforce: only 5%. It’s even more stark when you compare that with the more or less half of the workforce employed by all small firms.

But … and this is where it gets interesting … if you try to look at job creation using the static data, you learn that between 2006 and 2007 (the time period covered in my last post about the overall firm size data), overall employment grew by a minuscule 0.6% while at the same time employment at microbusiness employers increased by 3%.

That sounds just a bit more impressive until you realize that you’re talking about the difference between an increase of 687,100 jobs (overall) versus 179,878 jobs (micros).

The dynamic data — that is, the data put out by the Labor Department that shows jobs created, jobs lost and the net job gain/lost for the period — gives you a much more accurate picture.

The first thing you learn from the dynamic data is that job growth and decline is pretty stable in the middle, among those firms that are larger than micro and smaller than large. The largest firm size class and the smallest have a lot more churn, from a labor market point of view. The change in employment in those two firm size classes from 2005 to 2006 (the most recent year in which we have numbers) is almost the same — up about a million jobs net.

This tells us that large firms are an important source of new jobs but, as Kauffman has been yelling about since last year, very small and new firms are an even more important and perhaps more reliable source of net new jobs.

And this stuff doesn’t even get into the issue of self-created jobs — that is, nonemployers.

You see, while we tend to treat nonemployer firms as businesses, everybody tends to forget that every time somebody creates a new nonemployer firms that have essentially created a job for themselves. Certainly, they go from being unemployed or being otherwise employed to being self-employed — a change in employment status that is captured in the unemployment rate (from the Household Survey) but not in the job creation numbers (from the Establishments Survey).

This is the sort of statistical conundrum that gives me headaches on a regular basis, where you can understand the logic of why the data collectors count things the way they do but you can also see that the way they count things does not match feet-on-the-ground real life out here in the real world.

If you look at things that way — counting each new nonemployer business as a new job — then possibly you will understand why I’m so interested in the rate at which nonemployers have been growing over the last five and ten years, and the way that nonemployer growth has really accelerated since the turn of the century.

And, of course, none of this stuff addresses the amount of work created by microbusinesses (and farmed out on a project basis to other micros and nonemployers) — which is another important labor market contribution made by firms of all sizes that is not counted at all by the relevant parties.

You see, I think that one of the ways the 21st century economy is evolving is that the source of job creation is shifting from the company to the individual. That’s too big a change for many people to wrap their minds around at this point, especially those of us who are old enough to have been educated to be employees, and certainly too much change for the short-sighted people we tend to elect to public office.

But, looking at the numbers, that seems to me to be the way we may be heading.

Trish also wrote:

I love reading your narrative and highlights and viewpoints but I do wish I could pull up a page just with the pie charts and figures in comparison. Maybe you know of such a page. If not I would love to see it on your site and would happily link and write about it.

I don’t know of such a spot (although there probably is one) but I’ll tell you what, Trish. I’ll work on that (sounds kind of nifty) and I’ll let you know when it’s posted.

And thanks for writing.

And the numbers just keep on rolling in this week!

The U.S. Census Bureau has just released new nonemployer numbers for 2008 and, much to my surprise, they fell — for the very first time ever.

Which I guess just goes to show that nonemployers are tough but not invincible. In 2008, they got the stuffing kicked out of them.

Nonemployers, in case you need reminding, are firms with no paid employees outside the business owner(s) and at least $1000 in taxable receipts. This data set covers 18.8 million sole proprietorships, 1.5 million corporations and 1.1 million partnerships, which together comprise the total number of nonemployer businesses.

More than half a million of them failed that year (536,958 of them, to be precise) and only 180,257 launched over the entire year. When does that ever happen? The result was a net decline of 356,701 firms, or 1.6%, and the total declined from 21.7 million to 21.4 million.

In total, nonemployers generated $953 billion in receipts, a 3% decline, and average annual incomes fell for the second year in a row, down from $45.6K to $45.0K (a 1.3% decrease).

For the most part, the story here is that largish declines in the goods producing sectors were not offset by smallish increases in the services sectors. The change is not very large statistically speaking but it was a surprise in light of averaging close to a million new nonemployers over a period of more than five years.

Normally, in times of economic hardship, new business starts increase and, since most new businesses start as nonemployers, you’d think those trends would have been reflected here.

On the other hand, people generally have to be out of work for quite awhile to be desperate enough to fling caution to the winds and create their own jobs. Perhaps they weren’t quite desperate enough in 2008; the truly huge job loss numbers didn’t start until late 2008 and early 2009.

The biggest hits to the nonemployer population are no surprise at all, coming in the real estate (down by almost 200,000 firms) and construction sectors (another almost-130,000 firms lost).

It’s tempting to try to write this off as specific to those two industries, which had been hurting for some time by 2008. On the other hand, additional losses occurred in manufacturing, wholesale and retail trade, transportation/warehousing, information, and finance.

From that list, it seems pretty clear that the dip in consumer spending in 2008, which happened in response to accelerating job losses and the financial crisis at the end of the year, took its toll on the nation’s nonemployer firms, too.

On the other hand, when you turn around and look at the money, things might not have been so bad for many of the nonemployers who were still standing in the wake of the carnage.

Several industry sectors that saw declines in the number of nonemployer firms, also saw increases in receipts (overall or average). Those sectors include finance (average annual receipts up by 8%), transportation/warehousing (a distant second, up by almost 5%), and wholesale (up 2.7%).

Receipts in construction were only down by 5% and, in real estate, down by 2.6%, so those who were still in business at the end of 2008 weren’t doing too badly either, in terms of personal incomes.

The big story for this data year, in terms of growth, is to be found in the mining sector and, specifically, in oil and gas extraction. Nonemployers in mining increased their numbers by 7%.

More spectacularly, overall receipts for the sector were up by a whopping 29%. Annual receipts in the sector gained more than $18K per firm on average, which amounts to a 20% pay raise for business owners in the sector.

Elsewhere, the positive movement in the numbers in most of the services sectors was pretty small. The educational services sector and the health care services sector had been growing at a healthy clip (health care was still adding jobs through much of the recession) but for this data year, growth was tepid.

In educational services, nonemployers increased in number by 4.4% and improved their receipts by a paltry 0.5%. In health care services, nonemployer population was up 2.5% and receipts similarly gained by 2.6%.

The big question now is whether there were similar declines in employer firms in 2008. We have seen that 2007 saw a number of small businesses shrinking to micro-size. Clearly, these numbers do not suggest that there were many employers that shrank down to nonemployer size.

So, will we see similar trends in the employer firm size data for 2008 or was this just a particularly painful year for the normally sturdy nonemployer? We’ll have to wait until next year to find that out.

Cue the toe-tapping.

(Photo by ansik, via Flickr)

Well, finally!!!

So, in 2007, there were 27.8 million U.S. businesses and, of them, 91.6% were microbusinesses with fewer than five employees.

That represents a 3.6% increase in the U.S. business population from March 2006 to March 2007 and that’s a pretty healthy jump. However, that healthy jump consists almost entirely of nonemployer businesses, continuing the trend that became noticeable and notable back in 2003.

We know from numbers released by the U.S. Census Bureau in June of last year that the number of nonemployer firms increased from 20.8 million to 21.7 million in 2007, up 4.5% from 2006 levels.

Employer numbers increased much more modestly, as usual. Overall, the number of employer businesses grew by a relatively minute 0.5%, from 6,022,127 firms to 6,049,655 of them.

Microbusiness employers with fewer than five employees increased by only 1% over the year, while including microbuisness employers with up to ten workers reduces the amount of population growth to 0.7%. That is because the number of employer firms with between 5 and 9 employees actually declined slightly over the period.

Similarly, non-micro small businesses (those with more than five employees) decreased slightly in number between the 2006 and 2007 measures. And I do mean slightly — the difference is only 7,719 businesses out of more than 2.3 million, a 0.3% decline.

Large firms also experienced a fairly healthy increase in number compared to those non-micro small businesses — although, as usual, the raw numbers are minuscule compared to all those millions of microbusinesses.

Firms with more than 500 employees increased in number from 18,071 to 18,311. That is a 1.3% increase (an additional 240 firms) and that may explain what happened to some of those medium-sized firms; clearly a notable number of them grew to become large.

Obviously, that 240-firm increase in large businesses does not quite account for the almost-8,000 non-micro small firms that disappeared between 2006 and 2007. So where did they go?

As a matter of fact, if you look at the difference between the overall increase in employer firms and the increase in the smallest firm size class of microbusiness employers (fewer than five employees), it would appear that those firms did not necessarily fail but they may have shrunk to micro-size.

Between 2006 and 2007, there was a total increase of 27,528 in the business population. Microbusiness employers with fewer than five workers grew by 35,275 firms. From this, it looks like there were some failures (not very many, really), there were a few that grew from small to large and there was a sizable number that shrank from small to micro.

Given what happened later that year — recall that the NBER declared the recession to have started in December 2007 — it seems probable that this pattern will continue. There may be a few small firms that grow into largeness but there will probably be more small firms that shrink to microness through 2008 and 2009.

As for the proportional numbers, they continue to creep in the general directions in which they have been creeping.

Nonemployer firms have increased from 77.5% to 78.2% of all U.S. firms. Again, given what has happened in the economy since 2007 and Kauffman’s recent findings, I have very little doubt that nonemployers will be up to and possibly beyond 80% of all U.S. firms by 2009.

From a historical perspective, the number of nonemployers has increased by 40.5% in the ten years from 1997 to 2007. That compares, for example, to a 7.8% increase in nonemployers between 1992 and 1997 or, even better, a 23% increase in the number of nonemployers between 1992 and 2002.

I’m not making this up. Clearly, the growth in the number of nonemployers accelerated significantly during the early years of this century and, right now, it does not look like there is reason to suppose that trend will change.

The big question is this: even though their overall contribution to GDP is considered negligible, it matters that there are so many new nonemployer firms in the U.S. business population. What is that impact? And what are the implications for the Big Picture?

Proportionately speaking, microbusinesses did not increase by very much. Firms with fewer than five employees now comprise 91.6% (up from 91.2%) of U.S. firms, while those with fewer than ten workers make up 95.4% (up from 95.2%) of all businesses.

The middle continues to shrink. Non-micro small businesses with between 5 and 499 employees dropped from 8.7% of the business population to 8.4% of same. The large firm proportion remained consistent; they are still less than one percent (0.7%) of U.S. firms.

(I’ll be talking about the numbers with Dr. Zolten Acs, Chief Economist with the SBA Office of Advocacy on Monday, June 28th, on the next edition of Microbusiness Conversations. I hope you can join me.)

(Photo of tax forms by KOMUnews, via Flickr)

A little-publicized provision found tucked away in the health care reform bill is poised to bury microbusinesses under paperwork, according to a survey released last month by the National Association for the Self-Employed (NASE).

The prevision in question would expand IRS Form 1099 information return requirements. Currently, businesses must file 1099s for independent contractors to whom they pay $600 or more during the tax year. Under the new law, that would be expanded to include any vendor — including other businesses, even incorporated businesses.

Not only that, firms would have to get a Tax Identification Number (TIN) from the vendor before they could pay said vendor the full amount. If they never do get that TIN number, you’ll have to withhold a portion of the payment and send it to the IRS instead.

Very naturally, failure to comply involves fines.

The NASE was curious to know how microbusiness owners would be impacted by these new regulations, so they asked. What they learned was that microbusiness owners estimate that their tax compliance paperwork burden will increase by 1250%.

I’m a little fuzzy on how the NASE computed that exactly but let’s take a look at the numbers.

The first thing to note is that microbusiness owners are very, very familiar with IRS Form 1099. Almost 95% of respondents said they were familiar with the form; on average, they issued between about two of them and receive almost four of them in “the most recent tax year.”

But, if they’d had to file a 1099 for every single vendor with which they spent more than $600 that year, the number issued would climb to almost 27 forms. Which, now that I think about it, is probably where that 1250% came from.

So, once they got the time out of the way, the NASE started asking questions about money. They found that close to 60% of their member respondents pay an accountant or other tax preparation professional to help with their taxes and, of them, the largest group (34.8%) pay less than $500 for those services annually.

Another sizable group (31.5%) pays between $500 and $1,000 annually for said services.

Overall, 79.6% of microbusiness owners expect these new requirements to greatly or somewhat increase the amount of time it takes them on tax compliance chores. In addition, 74.3% of them expect the increased reporting requirements to greatly or somewhat increase the amount of money it costs them to comply with federal tax laws.

The one thing the NASE survey does not ask respondents is what they think or how they feel about all this. If I were forced to guess, I would say they probably are a mite unhappy about it.

Parenthetically, this survey sample does not precisely match the profile of microbusiness owners nationwide. Only half of them are sole proprietors, while 28.6% are incorporated and 20.3% are LLCs. Nationally, about 85% of all small businesses are sole proprietorships (including those with employees).

Similarly, respondent firms for this survey make more money than is average for the general population of small businesses. Within this survey sample, 11.3% of the firms said they earned less than $10,000 in 2009. Nationally, the number of small firms earning less than $10,000 a year is appallingly high (something like 50%) but I can’t seem to put my hand on that number right this second.

In spite of the caveats, I don’t think these results should be tossed out by the data police. Au contraire, I think the lot of microbusinesses is probably worse than indicated here, since most micros are smaller and less well-heeled than these respondents.

These are the things I think about when I hear somebody from the Obama Administration assert, with a straight face, that small businesses are central to their economic strategy and that they care about us, really they do!

Yeah, right.

(Photo courtesy of WhiteHouse.gov)

President Obama had dinner with members of the Business Council, a group composed of “150 active members, each of whom must be a chief executive officer of a leading private sector business from commerce and industry,” as described by members of the media.

The current chair of the group is the CEO of Caterpillar, Inc. Last night’s dinner invitees included:

• Ronald Williams, Chairman & CEO, Aetna
• Patricia Woertz, Chairman, President & CEO, Archer Daniels Midland Company
• Riley Bechtel, Chairman & CEO, Bechtel Group, Inc.
• Peter Grauer, Chairman, President & CEO, Bloomberg, Inc.
• Jim Owens, Chairman & CEO, Caterpillar
• Ellen Kullman, Chairman & CEO, DuPont
• Rex Tillerson, Chairman & CEO, ExxonMobil
• Jamie Dimon, Chairman, President & CEO, JPMorgan Chase & Co.
• Charles Moorman, Chairman & CEO, Norfolk Southern Corporation
• Steve Odland, Chairman & CEO, Office Depot
• James Goodnight, Chairman, President & CEO, SAS Institute Inc.
• Andrew Liveris, Chairman & CEO, The Dow Chemical Company
• Angela Braly, Chairman, President & CEO, WellPoint, Inc.

I hate to have to say this but there is no escaping (at least, for me) the conclusion that our dear President is a corporate suck-up.

Look at the evidence.

He has surrounded himself with a bunch of very smart people who, I have read, are hostile to small businesses as economic actors — in spite of all the rhetoric to the contrary.

His administration appears to have no use for small businesses unless they are on that old, 20th century growth trajectory that gave us “success stories” like FedEx and Microsoft.

During his campaign, he promised to elevate the SBA Administrator to a Cabinet-level position but he has not — largely because, I suspect, he genuinely does not believe that small business concerns are as important as that or that they should be that central to his economic policy.

Judging from his policy initiatives throughout this economic crisis, he doesn’t appear to have a clue about the real needs of small business. What has become crystal clear, however, is that he may be prepared to invest more in small firms that was his predecessor but when it comes to the amounts they are willing to pour into Corporate America, there’s not much to choose from between Messrs. Bush and Obama.

But, of course, I could just be reading all this wrong.

What do you think? This is the subject of this month’s Journal Blog Poll:

April Poll Results

Couldn’t inspire very many people to vote in last month’s poll, so I don’t know if these results would hold up with a larger sample of respondents. Nonetheless, it was interesting if unsurprising.

April Poll: Do you hire employees or independent contractors?

Independent contractors: 75%
Neither; I don’t hire anybody: 25%

And nobody hired full-time or part-time employees under any circumstances — at least, according to the few people who responded to the poll last month.

(Photo by szlea, via Flickr.)

America seems to be getting back to hiring again. Slowly but surely.

Which has inspired this, the Walmart version of a bit of microbusiness research that I am longing to undertake.

You see, politicians, economists and everybody else likes to fawn on small businesses because of the number of jobs they create. That is, as far as many are concerned, the primary value add of having small businesses in an economy: job creation.

Only, increasing numbers of small businesses — and particularly microbusinesses — are skipping the full-time employee thing in favor of independent contractors.

That only makes sense. Independent contractors are independent experts, which means they don’t have to be trained. Since they are not employees, hiring them involves less regulation and less paperwork. Hiring them also involves less expense because you are not required to provide them with any employee benefits.

All of which means that, even at the rather pricey rates some independent contractors charge, they are usually less expensive than full-time employees.

Meanwhile, as our nation’s leaders remain focused on jobs, jobs, jobs, it occurs to me that it is increasingly less about having jobs for people and more about having work for people. In fact, there’s already a little bit of research that seems to point in that direction.

In my latest Research Roundup for Small Business Trends, I wrote:

The SurePayroll Small Business Scorecard for February found that year-to-date small business hiring was up by 1.9%, “with continued and increasing reliance on independent contractors.” (Emphasis mine.)

(By the way, you really should go check out the entire article! Interesting stuff I found, if I do say so myself.)

If small business hiring is up (which government statisticians count) but that hiring is increasingly composed of contract workers (which government statisticians don’t count), then it is entirely possible that the work situation is not necessarily as dire as it seems when we judge the situation by the monthly job creation numbers from the Labor Department.

Clearly, with all the jumping up and down and yelling about jobs, and all the worry about a jobless recovery, the question of how microbusinesses address their personnel needs is particularly relevant right now.

Hence, our latest sidebar poll:

March Poll Results

Last month, we asked you whether you were interested in tax reform as a policy issue. And the quick answer to that question turned out to be … yes and no.

On the one hand, nobody who took the poll answered with a “No.” Fifty-five percent of respondents said that they care about tax reform and the remaining forty-five percent might care, depending on the reforms in question.

On the other hand, so few people actually took the poll that one could argue that most people really just aren’t interested. Which would be too bad, if it were true.

Tax compliance is absolutely, without a doubt, the top regulatory issue there is for microbusinesses. Attempts to reduce tax complexity, thus reducing compliance costs (in time and money), ought to be music to the microbusiness owner’s ears.

(Photo by US Army Africa, via Flickr)

Precisely two years ago this month, a consulting firm called Microbusiness Strategies LLC launched a series of interactive events called IssuesLive.

It was billed as a “national dialogue and needs assessment” for microbusinesses, with said dialogue to be taking place between said microbusiness owners, service providers, vendors, policy makers and media types.

Along with the actual events — which were organized in such a way as to allow in-person participation or online participation — participants were asked to take a (rather lengthy) poll as part of the registration process.

The resulting data offered a real snapshot of microbusinesses and their owners, what their challenges are, what policy issues they care about and what kinds of things they overcame as a startup.

The research report has finally been released, today, by the Microbusiness Research Institute (a division of Wahpmreneur Publishing, Inc., my publishing company). You can download a copy of the paper here.

The author of the paper is yours truly; it has taken up quite a bit of my time and energy through the first month of the year. I’m proud of the result.

It was the writing of this paper and the observations I was able to make about the IssuesLive events that brought me to realize how poorly microbusinesses fit into the infrastructure of the U.S. economy. That, by itself, is a pretty significant observation and certainly one that is worth further cogitation.

A few other major findings:

• Microbusiness owners identified “Financing/capital” as the top policy issue facing them, followed by the economy and health care.
• When asked was would help their firms become more successful, the issue that generated the broadest response from microbusinesses was taxes. However, while 48% of respondents want to pay lower taxes, more of them (54%) felt that tax simplification was extremely important and still more of them (62%) believe the tax code needs to be fairer
• Microbusiness owners identified financial issues as the primary barrier to entry into business ownership, naming “lack of consistent income” and “lack of access to startup capital” as the top two challenges that got in their way when they launched their firms.
• The most important current challenges to survey respondents were time and money.

Another thing that pleased me about this paper is that it gave me an excuse to rifle through my archives for my lit review. After reviewing all the researching I’ve been writing about for the past few years, I was able to see that we’ve actually learned a lot about microbusinesses over the years. It’s just that the information had to be teased out of larger research projects because almost nobody researches just microbusinesses.

Anway, I hope you get a chance to go check it out. It is my hope that this initial paper will spur further research. That will be a very good thing.

My friends at Forbes.com recently asked me the following question:

Recently, the U.S. Bureau of Labor Statistics reported a jump in the unemployment rate to 10.2%.Some economists think we could be looking at 10.5% by early next year.

Given these grim forecasts, how do you counsel recent college graduates and others entering the job market for the first time in this employment climate? Is there any advice or strategies you find particularly useful?

I bet you think you know how I’m going to answer this, don’t you? Well, maybe not.

I’ve been writing for some time about the probability that the business cycle trough followed by ‘jobless’ recovery has become the rule rather than the exception since the early 1990s. So, if you’re me, then the kneejerk reaction to the question is, “That’s easy! Let them pursue self-employment!”

But, in this situation, that advice is about as useful as the infamous “Let them eat cake.”

Above and beyond the fact that the prospect of self-employment is probably somewhat terrifying to the typical twenty-something coming straight out of college, there is also the likelihood that they have very little practical knowledge about how the real world of business works.

Failing that (or a reasonable facsimile in the form of business management training or entrepreneurial education), the odds against making a real, self-supporting go of self-employment are stacked against them.

Most of the thirty- and forty-somethings starting microbusinesses or going solo at least have some business-based life experience to draw on in the absence of education or parental modeling.

So, I don’t automatically recommend that they start a microbusiness or create their own job.

But I would recommend that they be willing to indulge in some unconventional thinking about how to approach the job market.

In light of today’s technology, there is certainly no reason to let geography limit your job search. If you had the self-discipline to get through college, then you almost certainly have the self-discipline to work remotely. Virtual businesses in your field are a possibility for you, so don’t exclude them from your search.

These days it is also more important than ever to work your network and your parents’ network and all the rest of the concentric networks you have at your disposal. In a climate in which there may be dozens or even hundreds of applicants per position, a connection that gives you an advantage is not to be sneezed at.

Final piece of advice: DON’T PANIC (with apologies to Douglas Adams). The jobs numbers are pretty dismal but let’s not forget that the monthly jobs numbers are simply telling us how many more jobs have been cut than have been created (or vice versa) for the previous month.

Millions of jobs were created in October but the number of jobs destroyed simply outnumbered them. The point is that jobs are still being created. Similarly, the unemployment rate may be 10.2% right now but I remind you that most Americans do still have jobs. There’s no need to freak out.

And, if all else fails, then you can still consider the option of self-employment! *wink*

Crowd. Photo by James Cridland

Last week, an article I wrote for AppGap (as a member of the Small Business Trends Expert Network) about nonemployers and the new role they might be expected to play in a 21st century economy caused a bit of a Twitter-powered stir.

Nothing that would bring down anybody’s servers or anything like that, but the article seemed to be well-received. In it, I essentially make the case that not enough people have figured out that nonemployer businesses can be viewed as businesses but they can also be viewed as newly self-created jobs.

As I asked some rather pointed questions towards the end of the article: What happens if the nonemployer business begins to jostle the regular, full-time worker in the labor market? What happens if the nonemployer model actually begins to replace the traditional employment transaction?

This is one of those times where you just have to shake your head and be happy that you communicate by ‘Net.

The first commenter on that article, Steve Ardire, was good enough to point me to a blog post that references a New York Times article by Floyd Norris with the following, rather astonishing datapoint:

The accompanying charts show the job performance from July 1999, when the economy was booming and companies were complaining about how hard it was to find workers, through July of this year, when the economy was mired in the deepest and longest recession since World War II. For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent.

(You’ll have to visit the original article in situ to access the ‘accompanying charts’.)

Now, let me try to reduce this to comparable numbers.

Since I don’t really want to take the time to fish out the BLS numbers and since we don’t have nonemployer numbers through 2009 yet, I’ll just note that the nonemployer decade will be slightly different from the employment/jobs decade.

The numbers from the Bureau of Labor Statistics on the number of jobs created and jobs destroyed (net job gains/losses) is for the decade from 1999 through 2009, while the nonemployer numbers are for the decade from 1997 through 2007.

So, we know from the above that the number of new new jobs for the decade from July 1999 through July 2009 was 121,000, an average annual increase of 0.01%.

Over approximately the same period, from March 1997 through March 2007 — not identical but lots of overlap here — the number of net new self-created jobs otherwise known as nonemployer businesses was 6,268,412, an average annual increase of 1.03%.

In other words, the growth rate of net new nonemployer businesses has been increasing at approximately 100 times the growth rate of net new jobs.

And do note that our nonemployer numbers end before the current, very deep recession started — that is, before the job losses really started racking up.

So here’s my question: Why hasn’t anybody (except Mr. Norris) noticed this yet???

I mean, I get that catching the trends before they become statistical and unavoidable and unimpeachable fact is not what government is good at. That’s why they never seem to catch a crisis in advance, before it becomes said crisis.

That’s seriously inefficient but, then, this is the government we’re talking about.

I’m just wondering what sort of anvil has to fall on somebody’s head (and which head, please?) before anybody notices what is blindingly, knock-down obvious to those of us out here in the real world.

What do you think?