Side Hustle Nation: The States Where America’s Solo Business Boom Is Cooling Fastest
Solo entrepreneurship is becoming an increasingly important part of the American economy. Nearly one in eleven working-age adults now runs a business without employees, including freelancers, consultants, rideshare drivers, property owners and people operating one-person businesses.
Productive.io analysed the latest available US Census Bureau Nonemployer Statistics for all 50 states to identify where solo businesses are most common and where their numbers are growing or declining.
Using this data we created a Solo Business Index based on three factors: the number of solo businesses relative to each state’s working-age population, their recent growth and whether that growth is speeding up or slowing down.
The results reveal some unexpected trends. The state with the highest concentration of solo businesses is not a major technology centre or a well-known low-tax state. The research also found that growth is currently accelerating in only a small number of states.
Key Fakeaways
- Florida has the highest concentration of solo businesses: The state has 137.9 solo businesses per 1,000 working-age residents, around 1.5 times the national average of 90.8 and significantly more than any other state.
- More than 30 million Americans run businesses without employees: The number reached 30.4 million in 2023, an increase of nearly two million, or 6.8%, since 2021.
- Solo business growth is slowing across most of the country: Growth slowed in 46 of the 50 states in 2023 compared with the previous year.
- Growth accelerated in only four states: Colorado, Montana, Nebraska and Oregon were the exceptions. Colorado recorded the strongest acceleration, with its growth rate increasing by 1.5 percentage points.
- Three states recorded a decline in solo businesses: Louisiana experienced the largest fall at 2.7%, followed by Georgia at 1.0% and Alabama at 0.3%.
- Delaware recorded the fastest overall growth: Its number of solo businesses increased by 13.2% over two years, narrowly exceeding Florida’s 12.5% growth.
A note on the index: Each state is scored from 0 to 100 based on solo business concentration (50%), two-year growth (30%) and growth momentum (20%). As concentration carries the most weight, the index mainly shows where solo businesses are most established, rather than where they are growing fastest. Positive momentum means growth accelerated, while negative momentum means it slowed.
The States With the Strongest Solo Business Economies
1. Florida
Index score: 88.6
- 137.9 solo businesses per 1,000 working-age residents, around 1.5 times the national average
- More than 3.1 million solo businesses, the third-highest total in the country
- 12.5% growth over two years, the second-highest rate nationwide
- Growth slowed by 2.1 percentage points, although the total continued to rise
- Transportation and Warehousing is the largest sector, accounting for 14.2% of the state’s solo businesses
2. Wyoming
Index score: 72.8
- 112.6 solo businesses per 1,000 working-age residents, the second-highest rate in the country
- Real Estate and Rental is the largest sector, accounting for 17.9% of solo businesses
- Average receipts of $79,197 per business, the second-highest figure nationwide
- 35.6% of solo businesses are female-owned, the lowest share of any state
- Business-friendly registration rules may increase its ranking, as some registered businesses may not reflect economic activity taking place within the state
3. Colorado
Index score: 64.5
- Solo business growth accelerated by 1.5 percentage points, the strongest increase in momentum nationwide
- More than 607,000 solo businesses, following two-year growth of 6.7%
- Professional and Technical Services is the largest sector, accounting for 16.7% of solo businesses
- 103.4 solo businesses per 1,000 working-age residents, one of the highest concentrations among larger states
4. Delaware
Index score: 60.4
- Solo business numbers increased by 13.2% over two years, the fastest growth nationwide
- Average annual receipts of $92,227 per business, the highest figure in the country
- Professional and Technical Services is the largest sector, accounting for 15.5% of solo businesses
- Growth slowed by 2.6 percentage points, but remained among the strongest nationwide
- Business-friendly registration rules may increase its ranking, as some registered businesses may not reflect activity taking place within the state
5. Montana
Index score: 57.8
- Solo business growth accelerated by 0.5 percentage points, making Montana one of only four states with positive momentum
- 109,660 solo businesses, following two-year growth of 6.7%
- 96.8 solo businesses per 1,000 working-age residents
- Real Estate and Rental is the largest sector, accounting for 14.8% of solo businesses
Where Solo Business Growth Is Accelerating
Solo business growth slowed in 46 of the 50 states during the latest year analysed. Only four states recorded faster growth than in the previous year:
- Colorado: Growth increased from 2.5% to 4.0%, an acceleration of 1.5 percentage points
- Montana: Growth increased from 3.1% to 3.5%, an acceleration of 0.5 percentage points
- Oregon: Growth increased from 2.2% to 2.6%, an acceleration of 0.4 percentage points
- Nebraska: Growth increased from 3.0% to 3.2%, an acceleration of 0.2 percentage points
These mid-sized states have a lower cost of living than major hubs such as California and New York. This may help explain why solo business growth is still accelerating in these areas, although the data does not prove a direct connection.
Where Solo Business Numbers Are Declining
Solo business growth slowed across most states, but three recorded an overall decline during the latest year analysed:
- Louisiana: Solo business numbers fell by 2.7%, the largest decline nationwide. Its growth rate also dropped by 5.8 percentage points, the sharpest slowdown of any state
- Georgia: Solo business numbers fell by 1.0%, despite the state having the country’s highest share of female-owned solo businesses at 48.0%
- Alabama: Solo business numbers fell by 0.3%
Nevada, New York and New Jersey continued to record growth, but their growth rates each slowed by more than 4.5 percentage points. This represents one of the sharpest declines in momentum nationwide.
Why Some Large States Rank Lower Than Expected
Having a high number of solo businesses does not always lead to a high Index ranking. The Index also considers population size, recent growth and whether that growth is accelerating or slowing.
- California: Has the highest number of solo businesses at more than 3.5 million, but ranks 25th with an Index score of 41.5. Its concentration of 90.8 per 1,000 working-age residents matches the national average, while annual growth slowed from 2.2% to 1.0%.
- New York: Has nearly 2 million solo businesses, the fourth-highest total nationwide, but growth slowed by 4.9 percentage points. This was one of the largest drops in momentum recorded, placing the state sixth overall.
- Texas: Has more than 3 million solo businesses, the second-highest total in the country, but ranks eighth. Annual growth slowed from 5.5% to 2.3%, a drop of 3.2 percentage points.
These results show that the total number of solo businesses tells only part of the story. A state can have millions of solo businesses but rank lower once its population size and slowing growth are considered.
The Lowest-Ranking States
50. West Virginia
Index score: 19.6
- 53.5 solo businesses per 1,000 working-age residents, the lowest concentration nationwide
- Average annual receipts of $46,154 per business, the lowest in the country
- 94,681 solo businesses, following two-year growth of 4.0%
- Growth slowed by 1.8 percentage points
49. Louisiana
Index score: 22.5
- Solo business numbers fell by 2.7%, the largest decline nationwide
- Growth slowed by 5.8 percentage points, the sharpest drop in momentum
- Only 0.2% growth over two years, meaning overall numbers remained almost unchanged
48. Alabama
Index score: 25.3
- Solo business numbers fell by 0.3%, making Alabama one of only three states to record a decline
- Growth slowed by 4.6 percentage points, one of the largest drops in momentum nationwide
47. Iowa
Index score: 25.9
- Annual growth slowed from 3.4% to 0.3%
- Momentum fell by 3.1 percentage points, leaving growth close to zero
46. New Mexico
Index score: 26.6
- 66.2 solo businesses per 1,000 working-age residents, well below the national average
- Annual growth slowed from 3.9% to 1.1%
The lowest-ranking states generally combine a below-average concentration of solo businesses with rapidly slowing growth. In three states, solo business numbers declined altogether.
The Industries Driving Solo Business Activity
Professional and Technical Services is the largest solo business sector nationwide, with more than four million businesses. It ranks first in 20 states and includes consultants, designers, accountants and other independent professionals.
However, the leading sector varies across the country:
- Transportation and Warehousing ranks first in 12 states and includes many rideshare and delivery drivers. Illinois has the highest share, with the sector accounting for 17.8% of its solo businesses.
- Real Estate and Rental leads in Wyoming, Montana, Nebraska, North Dakota and South Dakota. These figures may include rental property businesses alongside other forms of solo work.
- Other Services, including personal care, repairs and beauty, is the largest sector in Tennessee, Georgia, Louisiana, Mississippi, Alabama and Michigan.
- Construction is the leading solo business sector in Maine, Kentucky, Oklahoma and Arkansas.
Who Owns America’s Solo Businesses?
- Women own 42.3% of solo businesses nationwide. Georgia has the highest share at 48.0%, while Wyoming has the lowest at 35.6%.
- Minority owners account for 39.0% of solo businesses. Hawaii has the highest share at 64.0%, compared with just 5.8% in Vermont.
- Veterans run more than 1.35 million solo businesses, representing 4.5% of the national total. Alaska has the highest proportion of veteran-owned solo businesses at 9.8%, more than double the national average.
What This Means
The pandemic-era boom in solo businesses has not ended, but it is losing momentum. Most states are still recording growth, although at a slower pace than one or two years ago. A small group of states, led by Colorado, are going against this trend, while three states have already seen their number of solo businesses decline.
For workers and aspiring founders, the states to watch are not necessarily those with the largest number of solo businesses today. Florida and California are likely to maintain their scale advantage for years, but Colorado, Montana, Nebraska and Oregon are the only states where growth is accelerating. These states could drive the next wave of solo business growth as larger markets settle into a slower, steadier pace.
Methodology
The index ranks all 50 US states on the strength of their solo business economies using:
- Business density (50%): Nonemployer businesses per 1,000 residents in 2023
- Two-year growth (30%): Percentage growth from 2021 to 2023
- Momentum (20%): Change in the annual growth rate between 2021–22 and 2022–23
Each measure was normalised to a 0–100 scale before the weighted scores were combined.
A nonemployer business is a taxable business with no paid employees and is the closest official measure of freelance, consulting, gig and side-hustle activity. Data comes from the US Census Bureau’s 2021–2023 Nonemployer Statistics, with 2023 being the latest data available, alongside 2023 Population Estimates and 2023 Nonemployer Statistics by Demographics.
Washington, D.C. and US territories were excluded. As businesses are counted where they are registered, states such as Wyoming and Delaware may rank higher than their level of local economic activity suggests.
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