Half of America’s Employer Businesses Sell Under $500,000 a Year. They Average Two People.

The Census Bureau publishes every American employer by how much it sells, and almost nobody reads that column. 3,446,110 of the country’s 6,395,635 employers — 53.9% — turn over less than half a million dollars. Between them they employ 7,173,968 people.

The revenue column nobody reads

Almost every published statistic about small business is cut by headcount — under five employees, under twenty, under five hundred. The Census Bureau also publishes the same universe cut by sales, and the two pictures are not the same one. Sorted by what they sell, 6,395,635 employers fall into eighteen bands, and the bottom two hold 53.9% of them.

That bottom band is the one worth sitting with. 1,097,913 businesses in this country have a payroll and sell under $100,000 a year. The average one employs 1.2 people. Not one and a half. One — the owner, if the owner is on payroll, and not much else.

What one job costs in sales

Turn the ladder around and it shows how much sales sits behind each person on the payroll. This is an average, not the price of your next hire — but it is the closest thing the published data has to one. At the bottom of the range it is $43,285 of sales per employee. At $1m to $2.5m of turnover it is $146,231. At the very top of the file — businesses selling over $100 million — it is $525,676, 12 times the figure at the bottom.

It is tempting to read that as a productivity story, and to some extent it is. But the money does not land the same way. Across the full range — the smallest band against the $100m-and-up band — sales per employee runs 12× while payroll per employee runs only 3.6×, $21,957 against $79,701. The four rungs below stop at $10–15 million, where the same gap is already $237,459 of sales against $58,337 of pay.

1,097,913 American businesses have a payroll and sell under $100,000 a year. The average one is a single person.

What this does not say

Three limits, and the first is the big one. This file counts employers only. The roughly 28 million American businesses with no payroll at all are not in it, so 2.1 is the average among businesses that have already hired someone — the floor here is one, not zero. Second, employment is counted in a single March pay period, so a seasonal business reads low. Third, an owner who takes a distribution rather than a wage is not counted as an employee, which means the number of people actually in these businesses is higher than the employment column shows, often by exactly one.

And this is a photograph, not a path. A business does not travel up these rungs; each band is a different set of companies on one day in 2022. The employment figure for the bottom band carries the Bureau’s heaviest noise flag, so it was tested against a deliberately wide margin before being printed — it survives at 0.98 to 1.33 people, which is still one person either way.

If there is a practical number in here it is the one at $500,000. Below it the average business is 2.1 people and the owner is one of them. In the band just above it the average is 5.7, and across everything above the line it is 44. That is where the job changes from doing the work to deciding who does it. 3,446,110 businesses are on the near side of that line.

Published by The Lonely Entrepreneur — the community and coaching platform for entrepreneurs who are building alone. lonelyentrepreneur.com

This article is for educational purposes and is not a substitute for professional financial or legal advice.