The easiest way for people who've lost a job to start a business is to keep doing the same kind of work they've always done, but no longer as an employee of a company.
Call it miscellaneous work income, freelance income, sub-contracting or consulting, you're most likely filing Schedule C as a sole proprietor who works for competitors of your former firm, or maybe even still for your former firm.
Believe it or not, it's the single largest category of "company" in America. In 2009 22.7 million sole proprietor returns were filed with the IRS representing total business receipts of $1.2 trillion. This is a relatively small sum as you'll soon see, but this category of Mom and Pop small business easily outnumbers the others.
Partnerships in 2008, for example, numbered just 3.1 million returns, and represented 19.3 million partners and total business receipts of $5.9 trillion. A close second for numbers of individuals represented.
S Corporations came in at nearly 4 million returns in 2007, representing $6.1 trillion in total business receipts.
Rounding out the picture are the corporation heavy hitters most Americans still work for, which filed 5.8 million returns in 2008 accounting for total business receipts of $28.6 trillion. That's a lot of moolah. These are the companies which provided you with such things as workmen's compensation and unemployment coverage as a matter of the law.
When they fired you in 2008, 2009 and 2010 and you started your own "business", you learned that you had to fly without that net under you. You also got to learn about the true cost of such things as Social Security, for which you only used to pay half. Now you get to pay it all, but of course you also get an adjustment to income for it, just like a real business.
If you're in misery about it all as tomorrow's tax deadline looms, you've got lots of company. Around 22,699,999 strong.
