November 10, 2025
Nonemployer establishments—businesses without paid employees, that are subject to federal income taxes, and which have annual receipts of $1,000 or more1—are a large and growing presence in the U.S. economy. Consisting mostly of unincorporated self-employed individuals as well as some partnerships and corporations, U.S. nonemployer establishment counts grew every year besides 2008 from 1997 to 2023. Despite representing a minority of the nation’s employment, they now comprise the bulk of American business establishments.
Some nonemployer businesses are operated by individuals who use them to supplement their primary income—for example, rideshare drivers or artisans selling handmade goods through online platforms. However, many nonemployer firms serve as the main source of income for their owners, representing full-time entrepreneurial ventures. Some examples of nonemployer firms could include independent rideshare or food delivery drivers, Airbnb hosts, hairstylists, freelance web developers, and many other types of work throughout all industries.
This article takes a closer look at Michigan’s nonemployer business establishment trends using data supplied from the Census Bureau’s Nonemployer Statistics (NES) program. NES publishes annual datasets containing statistical information on the number of nonemployer business establishments and total receipts. Information on establishments with paid employees— derived from the Census Bureau’s County Business Patterns (CBP) program—helps to provide further context on nonemployer trends. Like NES, CBP generates annual statistics on establishment counts, as well as additional employment and payroll figures.2
As with the rest of the nation, nonemployer establishments have risen rapidly in Michigan over the past several years. From 2013 to 2023—the most recent year for which data is available— nonemployer counts increased from 687,000 to 815,000 establishments, an 18.6 percent jump. This far outpaced gains for Michigan employer establishments, which rose just 5.5 percent, from 217,000 to 230,000. Over-the-decade gains for both Michigan establishment types lagged the nation, however; from 2013 to 2023, U.S. nonemployer establishments soared 32.3 percent, while employer businesses leapt by 11.7 percent.
Author:
Nonemployer Establishment Count, 2013-2023
Average Over-the-Year Percent Growth in Nonemployer and Employer Establishments
Source: 2013-2023 Nonemployer Statistics (NES), U.S. Census Bureau; 2013-2023 County Business Patterns (CBP), U.S. Census Bureau
Due to the persistent gap between nonemployer and employer growth, the nonemployer share of all Michigan business establishments rose from 76.0 percent in 2013 to 78.0 percent in 2023, a 2.0 percentage point gain. This is in line with trends for the nation. Nonemployers accounted for 78.4 percent of all U.S. businesses in 2023, up from 75.4 percent in 2013 (+3.0 percentage points).
Nonemployer Percent Share of Total Business Establishments, 2013-2023
Source: 2013-2023 Nonemployer Statistics (NES), U.S. Census Bureau; 2013-2023 County Business Patterns (CBP), U.S. Census Bureau
Michigan had 815,000 nonemployer businesses in 2023 spread across 18 industry sectors. There were three industry sectors that accounted for over a third of the state’s nonemployer businesses: Other services (102,000, 12.5 percent); Professional, scientific, and technical services (98,000, 12.0 percent); and Transportation and warehousing (89,000, 11.0 percent). Nationally, the top three industries were identical; Professional, scientific, and technical services ranked first (13.4 percent), followed by Transportation and warehousing (13.3 percent) and Other services (10.5 percent).
Over-the-Year Percent Change in Nonemployer Establishment Count by Industry Sector, 2022-2023
