We’re delighted to announce the release of the second edition of the Collective B1 Economic Report, which offers a window into the financial performance and business outlook of solopreneurs in the United States during the first half of 2023. The report highlights the resilience and optimism among solo business owners, despite economic challenges and rising expenses.
Solopreneurs are betting on themselves
In January 2023, in the face of rising inflation and warnings from economists, 43% of solopreneurs surveyed in the inaugural B1 Economic Report expected a stronger first half of the year. Their expectations proved largely correct. Six months later, in August 2023, over 72% said their businesses did as well or better than they had expected.
During the first half of 2023, revenue for Businesses-of-One experienced a consistent rise, with an overall increase of 9.8% year-over-year. Despite a 23.6% increase in expenses, Businesses-of-One still outperformed their optimistic expectations for the first half of 2023.
“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.
Some industries are feeling the sting of inflation, yet remain hopeful
Across industries, videographers, photographers, and software developers were the highest earners, yet also incurred high expenses. Businesses-of-One specializing in sales and marketing experienced a 19% increase in revenue, and despite rising expenses, maintained the healthiest margins.
Real estate agents’ revenues fell the most year-over-year, decreasing by 16.8%, as rising mortgage rates pressured the market. Artists and designers endured the biggest jump in expenses in the first half of 2023, nearly 36% higher year-over-year.
Despite increasing expenses and no revenue growth, artists and designers rated their solo businesses as the healthiest. Marketers also ranked their businesses highly, which is not surprising considering their strong revenue growth in the first half of 2023. All industries expected to grow in the coming months, with no industry rating their business health as poor.
Businesses-of-One are set to embrace AI
Looking ahead to the second half of 2023, 86% of solo business owners believe it will be better or equivalent to the first. This confidence is backed by the expectation that Artificial Intelligence (AI) will revolutionize their businesses. An encouraging 78% of them expect AI to change their operations, with 68% believing it will benefit their businesses.
“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.”
An optimistic outlook for Businesses-of-One
Despite inflation and financial adversities, Businesses-of-One have shown resilience and adaptability, reaching new heights in revenue and maintaining positive expectations for the second half of 2023. Their ability to rapidly embrace new technologies such as AI sets a benchmark for other businesses and points to an exciting future for solo entrepreneurship in America.
For more insights about America’s Businesses-of-One, including regional and industry-based insights, download the full report. The next B1 Economic Report will examine H2 2023 and will be available in H1 2024.
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.