SAN FRANCISCO, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Collective, the first all-in-one online back office platform for solopreneurs, today released the latest edition of its semiannual B1 Economic Report. It delivers insights into the American economy by measuring the health of Businesses-of-One1, which make up over 80% of small businesses in the US. The report reveals 9.8% year-over-year growth in revenue for the average solo business during the first half of 2023, tempered by a 23.6% leap in overall expenses. Despite decreasing profit margins, solopreneurs were optimistic about the second half of 2023 and about the role of AI in driving efficiency in their businesses.
Businesses-of-One outperformed optimistic expectations for the first half of 2023
- In January 2023, in the face of rising inflation and warnings from economists, 43% of solopreneurs surveyed in the inaugural B1 Economic Report nonetheless expected a stronger first half of the year, while only 17% expected business to be worse.
- In August 2023, over 72% said their businesses did as well or better than they had expected in the first half of the year.
Businesses-of-One are even more optimistic about the second half of 2023
- 86% of surveyed solopreneurs now expect business performance in the second half of 2023 will be better than or the same as in the first half – compared to 81% going into 2023.
Some sectors are feeling inflation’s sting more than others
- Real estate agents’ revenues fell the most year-over-year (-16.8%) as rising mortgage rates pressured the market.
- Businesses-of-One in sales and marketing grew their revenue the most year-over-year (18.9%) but also saw expenses rise dramatically (25.9%).
- Expenses for artists and designers rose the most of any sector year-over-year (36%), even as their revenues were flat (-1.67%).
Businesses-of-One see AI as future friend, not foe
- Solopreneurs see opportunity on the horizon when it comes to the availability of new AI tools to help them with their businesses. 78% of surveyed solopreneurs recognize that AI will transform their operations, 68% are embracing AI tools like ChatGPT to enhance their work efficiency, and only 10.5% are worried about the potential impact of AI.
“It’s amazing to see that in the face of real macroeconomic headwinds, Businesses-of-One are even more optimistic than they were at the start of the year. Even more exciting is that they’re being rewarded for their determination. The initial bets they made on themselves are paying off,” said Collective CEO Hooman Radfar.
New economic data from the White House indicates that the labor market in Q3 2023 remains tight. Freelancers and other Businesses-of-One may be helping fill the gap between high numbers of job openings and low unemployment. Solopreneurs may also become fresh sources of innovation as they more rapidly adopt AI, accessing newer tools without the restrictions of corporate policy.
“Given that their time is literally their money, Businesses-of-One have to be the most thoughtful about how they spend their time,” added Radfar. “That’s why they're among the first to embrace new tools like AI to make it even more productive and why they’re using platforms like Collective to focus more time on their customers.”
Collective’s semiannual report, available for download, also includes regional and sector-based insights that can be useful to solopreneurs as benchmarks for their own businesses. The next B1 Economic Report will examine H2 2023 and will be available in H1 2024.
About Collective
Collective is the first online back office platform designed for businesses-of-one. Collective’s AI technology and team of trusted advisors gives its members the freedom to focus on what matters by taking care of everything from business incorporation to accounting, bookkeeping, tax services and access to a thriving community – all in one platform. Collective wants running your own business to be as seamless as taking a full-time job. The company is run by a group of serial entrepreneurs and businesses-of-one who believe in empowering self-employed people to enjoy the same tax savings that big companies get. It’s a San Francisco-based startup backed by General Catalyst, QED, Google’s Gradient Ventures, Expa, and prominent investors who have financed and built iconic companies like YouTube, Substack, Twitch, Box, Instacart, Lyft, and more.
Website: https://www.collective.com/
Methodology
The information in the H1 2023 Collective B1 Economic Report is based on aggregated operating expense and revenue data derived from a sample of ~700 Businesses-of-One from January 2022 through June 2023, calculated with an estimated 98% accuracy due to some fluctuations with data availability. In addition, in August 2023, 105 of Collective’s members responded to a survey.
Contact
Kristina Leal
Firebrand Communications for Collective
collective@firebrand.marketing
415-848-9175
1 Business-of-One refers to companies run by full-time solopreneurs.
