The COVID-19 pandemic has led to an unexpected Small Business Surge Amid COVID-19, with a record 5.4 million new ventures launched in 2021, according to a recent report by Accenture. The research reveals that 10% of professionals now operate a side hustle, with 80% intending these to become their primary income source. These new, digitally savvy entrepreneurs typically aspire to keep their businesses small and have unique needs and goals. The transition to remote work has been essential for these entrepreneurs, with over half stating they could not continue their business if required to work full-time in an office. The study recommends that employers foster flexibility to retain staff and businesses seeking to support these new ventures should aim to form long-term partnerships, segment their small-business consumers, customize pricing models, and leverage digital platforms to engage these entrepreneurs. Funding for these new businesses primarily comes from personal funds, personal networks, and small-business loans, signaling lower barriers to entry for the new wave of entrepreneurs.
Impact of COVID on Budding Entrepreneurs
A newly released report by Accenture highlighted one of the impacts of COVID on budding entrepreneurs. Their research found the following:
Trends in New Business Creation
- 10% of professionals have some type of small business on the side (a/k/a “side hustle”)
- In 2021, 5.4 million new businesses were created (a record number), topping the 4.4 million created in the prior year
- 80% of the “side hustles” created by professionals are planned to eventually be their main source of income
- These “next-generation” small businesses are 2X more digitally savvy than other small businesses
- 70% of these founders intend for their businesses to remain small
- These new entrepreneurs have a different set of goals and needs than their predecessors
Impact of Remote Work
- In 2020, 64% of the owners said they couldn’t continue their businesses if they had to work in the office full-time
- In 2021, 57% of the owners felt the same way
Recommendations for Employers and Businesses
- For employers, they should attempt to give employees the flexibility to pursue their passions to help with employee retention
- Also, for businesses that wish to cater to these new ventures, it is recommended that they focus on the following:
- If possible, aim to be a long-term partner with these new entities
- Segment small-business consumers based on their type and need
- Customize pricing models, especially since most of their ventures are self-funded
- Focus on social media, search engines, and other means to meet the small businesses where they are active
Sources of Funding for New Entrepreneurs
- About 74% of these new entrepreneurs are using their own funds
- 36% have also used personal networks for funding
- 26% have accessed small-business loans
- The new wave of entrepreneurs is finding lower barriers to entry than in the past
Question & Answer
What percentage of professionals have a side hustle according to the Accenture report?
According to the Accenture report, 10% of professionals have a side hustle.
How many new businesses were created in 2021, as stated in the report?
In 2021, a record number of 5.4 million new businesses were created, topping the 4.4 million created in the prior year.
What percentage of side hustles created by professionals are planned to eventually be their main source of income?
According to the report, 80% of the side hustles created by professionals are planned to eventually be their main source of income.
What are some recommendations for businesses seeking to support these new ventures?
Businesses seeking to support these new ventures should aim to be long-term partners, segment small-business consumers based on their type and need, customize pricing models, and focus on digital platforms to engage these entrepreneurs.
