The COVID-19 pandemic led to many people being forced to work from home, and even costed many people their jobs. However, this influx of free time, coupled with the financial necessity, led to many people starting up their own businesses.
Self-employment has always been a risky path to choose, but the pandemic made it a more appealing option. Whether it was the need for additional income, the extra free time due to a lack of commuting, or a combination of the two, side hustles and new businesses have been springing up fast over the past year and a half.
FreshBooks, known for their accounting software, has looked at the self-employment statistics over the course of 2021 and put together a report summarizing the most noteworthy developments in the world of self-employment, which has had its most important year to date.
Most Noteworthy Self-Employment Stats
FreshBooks has found a lot of noteworthy data through their report. FreshBooks definitely has a motive for pushing the narrative of a self-employment surge, as the more businesses that start, the more that can use their product. However, this data is hard to dispute, and the reasoning behind the increase in self-employment is sound. Here are some noteworthy findings from the report:
- 95% of self-employed Americans plan to stay self-employed for the foreseeable future
- Among owners of businesses less than 2 years old, nearly two-thirds agree that self-employment remains the best career choice in uncertain times such as a pandemic.
- 2 in 5 recent entrepreneurs say COVID-19 at least in part created their opportunity for self-employment
- Gender-based discrimination in the workplace remains a factor as nearly two-thirds of women considering self-employment say it’s at least a partial motivator
- Racial motivations were similar, with 10% of workers of color mentioning said motivation to start their own businesses
The report cites five major motivations for those starting their own business. The most obvious one is the pandemic, as you may have guessed. The next two are the pursuit of a meaningful career and a better work-life balance. Both of these are based on people looking for more overall fulfilment in their careers and life. The final two were the aforementioned gender and racial discrimination issues.
The Future of Self-Employment
We've been in a gig economy for quite some time now. However, as the pandemic caused people to realize how unfeasible that is for a long-term economic system, many took to starting their own businesses in order to wrest back control of their own income.
Over 4.4 million businesses started up over lockdown in America alone. If you consider the fact that this article was written in February of 2021, and that many people who start side hustles don't count as officially registered businesses, the amount of people launching business endeavors is unprecedented.
COVID-19 was one cause of the issue, as people had more time and financial incentive, but there has also been a massive exodus from the American workforce over the past year. 4.4 million people (3% of the American workforce) have quit their jobs due to dissatisfaction with pay, conditions, or how the businesses handled the pandemic. These millions of people may simply work elsewhere, but a large percentage may be preparing to start businesses of their own.
It's hard to imagine this trend not continuing as the economy levels out. While many of these businesses will have likely not stood the test of time, there will also be people who didn't start businesses who will now be getting enough of a grasp on their finances to start their own businesses. While we may not see a similar meteoric rise in new businesses like this in a long time, it's a safe bet to believe that new businesses will be starting up at a larger rate than pre-pandemic.
How to Start Your Own Business
In the digital age, there is a wide variety of tools and software that can help you fully grasp the various sides of running a business. If you're interested in spreading your brand and really getting your name out there, you'll need a website. Luckily, with a website builder, creating your own website is something that can be completed over a weekend.
And it's not just your own website – you'll want to spread the word about your business on social media sites like Twitter and Facebook – a task which can be easily completed using affordable social media management tools.
On the more bureaucratic side, there are software platforms that can help you cover payroll, which can get a bit dizzying when you need to cover individual employees' tax forms, as well as accounting software, which can help you not only manage your business taxes, but expenses, invoices, and other financial matters.