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.
95% of self-employed Americans plan to stay self-employed for the foreseeable futureAmong 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-employmentGender-based discrimination in the workplace remains a factor as nearly two-thirds of women considering self-employment say it’s at least a partial motivatorRacial 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. 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. 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.
