Home Builders - Census Bureau News Offers A Profile of Typical Construction Business Owners In Minnesota
Destiny Homes has been building luxury homes and remodeling fine Minnetonka residences in Minneapolis and St Paul residential communities since 1977. Founded and owned by Butch Sprenger with his wife and home designer, Liz, their work on luxury residential homes from estates to historical homes to new construction of all home styles has earned them a name of reputation as a premier builder in the Twin Cities.
The new United Stated Census Public Use Microdata Sample survey findings from tax data indicates the sector of home builders is dominated by small businesses, particularly fiscally-transparent entities that report and pay income taxes at individual filing rates. The first-ever Survey of Business Owners (SBO) Public Use Microdata Sample (PUMS) was recently released. It highlights the U.S reliance on small business construction owners to meet the demand for new constitutions as home inventories dip, and construction owner's reliance on available capital to meet that demand. Destiny Homes, a Twin Cities luxury residential home builder and remodeler has know 35 years of successful residential construction projects and comments on the report. You can find the survey at www.census.gov/econ/sbo/pums.html.
Owners Of Construction Businesses Are Committed To Long Hours
According to recently-published Census Bureau’s 2007 Survey of Business Owners (SBO) data, businesses in the construction sector draw upon various sources of capital for getting stated and managing expansion plans. especially sources that are closely connected to the owner’s (or owners’) assets. The data additionally suggests that construction industry business owners often work extensive hours, and that becoming a successful enterprise in residential construction demands it.
Running any successful small business includes the owner’s ability to dedicate a significant amount of time. According to the SBO data, this is particularly true for businesses in the construction sector.
53% of owners reported working more than 40 hours a week in all businesses
59% of construction business owners worked more than 40 hours a week
23% of construction business owners reported working 60 or more hours per week
91% Construction Business Owners Work Over 40 Hours Per Week
As NAHB expected and summarized, "The vast majority of primary owners reporting lengthier workweeks tended to operate businesses with fewer workers. Indeed, firms with fewer than 20 workers on the payroll accounted for 91% of businesses in the construction sector with owners working more than 40 hours per week".
Construction Business Owners
The SBO Public Use Microdata Sample is useful today. Even though it's data is from 2007, it empowers today's analysts to more closely scrutinize sets of business characteristics from it than can be obtained from the standard published tables. The SBO PUMS has allowed researchers at The National Association of Home Builders (NAHB) to scrutinized the construction sector in detail to glean insights from different financial and demographic view points.
Sole Proprietorships Dominate Construction Industry
According to NAHB's account, "in 2008 there were 570,987 S Corporations in the construction sector, generating $932 billion in gross revenue. Further, there were 203,285 partnerships in the construction sector with gross revenues totaling $273 billion. The most dominant form of business organization in construction, in terms of counts, is the sole proprietorship, with more than 2.8 million Schedule C returns filed in 2008 reporting $207 billion in gross revenue."
Given this structure of the industry, where do entrepreneurs raise capital to start up their businesses in the first place? The 2007 SBO data indicate that personal savings are a commonly used source of small business start-up capital and more so for the construction sector. A little more than 63% of all businesses relied on personal savings as a source of start-up capital, with the share rising to 66% for construction firms.
Census Bureau Survey Data:
Reveals that the size of construction companies mattered in realization to those who accessed personal savings to initiate their business as a home builder :
67% of construction firms with 10 or fewer employees
62% of construction firms with 10 to 19 employees
59% of construction firms with 20 to 49
57% of construction firms with 50 to 99
57% of construction firms with 100 employees or more.
Loving The Work And Put In Long Days
A necessary ingredient of any successful small business is the owner’s ability to dedicate a significant amount of work/management time. According to the SBO data, this is particularly true for businesses in the construction sector. As expected, the vast majority of primary owners reporting lengthier workweeks tended to operate businesses with fewer workers.
53% of owners reported working more than 40 hours a week. For the construction sector
59% of owners worked more than 40 hours a week
23% reported working 60 or more hours per week.
Less than 20 workers on the payroll accounted for 91% of businesses in the construction sector with owners working more than 40 hours per week.
SBO Data Next Updated In 2017
The SBO is part of the Economic Census and is only conducted every five years in years ending in "2" and "7." We will have to wait till 2017 for updated data on construction owners from this source.
One valuable summary drawn from the Census data is that most construction businesses are integral, transparent small firms whose success depends on the efforts of a few hard-working dedicated individuals. These builders are key to the demands for new construction. For them to meet that demand and succeed in putting new homes out on the market for buyers, sustainable lending is necessary, which in turn will create new jobs to accomplish the work. As housing demand grows once again, legislators, politicians, and real estate professionals need to keep this in view.
Destiny Homes is a member of The Builders Association of MN which says, "The residential construction industry generates millions of dollars of the state’s economy and provides jobs for tens of thousands of Minnesotans." Contact Destiny Homes for building luxury homes and remodeling fine residences in Minneapolis and St Paul residential communities. Call and ask for Butch or Liz Sprenger at 952-934-5706.
Download the Census Bureau Survey Of Business Owners Guide
Download the US Census Bureau Construction Spending September 2012
Butch and Liz Sprenger, owners of Destiny Homes Remodeling And Renovation Services Home page: www.destiny-homes.com. Service the entire Twin Cites Metro, from our main office in Deephaven, MN working as home Remodeler and owner of Destiny Homes.