Recent economic data shows: more people are starting businesses, but small business employment declined. According to the SBA’s General Economic Bulletin for First Quarter 2025, self-employment reached 17 million people by late 2024—a record high. Yet small business employment dropped in Q2 2024, marking the first decline since Q3 2023.
What could be driving this? Maybe new entrepreneurs are starting solo and haven’t reached the hiring stage yet. Or perhaps established businesses are pausing hiring due to economic uncertainty. Could be both, or something entirely different. The truth is—we don’t know yet, but the pattern is worth watching.
Why This Matters
For business owners, this trend could raise questions about growth strategies. If you’re planning to expand, it might be worth considering whether to hire employees or explore ways to scale without adding payroll. The data suggests many entrepreneurs may be finding success staying lean.
From an economic perspective, this pattern might signal a shift toward more capital-efficient business models—or it could reflect broader business uncertainty causing both new entrepreneurs to start cautiously and established businesses to pause hiring. If small businesses continue this pattern, we might see implications for job creation and wage growth.
Strategic Considerations
Near term, consider whether your growth strategy requires immediate hiring or if you can leverage technology, outsourcing, or partnerships to scale first. Monitor your industry—are competitors staying lean or investing in talent? This environment may continue to favor those who can grow efficiently.
What are you seeing? More solo entrepreneurs or businesses being cautious about hiring? Your real-world observations help make sense of these numbers.