EmployBridge’s Joanie Billy explains what the March jobs report says about the state of the US economy on Making Money.
The proportion of small businesses started last year by owners who worked for someone else has nearly doubled from 2022, new data shows.
A recent survey of 1,300 new business owners by payroll company Gusto found that by 2022, the proportion of new business owners who are working full-time or part-time for another employer while starting their business will be This rapidly increased from 27% in 2023 to 44% in 2023.
Liz Wilke, Gusto’s chief economist, said in an interview with FOX Business that when she saw the numbers, she said, “Wow, this is a really big jump… and when there’s a big jump like that, it’s usually one “It’s not just that,” he said.
Wilk believes this surge is due to multiple factors. One is that, although not unique to 2023, the rise of remote and hybrid work has created greater flexibility in the time and space for people to work day and side jobs alike.
But there were several factors last year that led to the jump from 2022, she said.
“After 18 months to two years of very severe inflation, 2023 is in a sense the peak of inflation. Prices are still quite high,” the economist said. “Add to that the fact that the economic outlook is feeling a little precarious for some people right now.”
This, and the fact that people no longer have to quit their jobs to start a business, as entrepreneurs once did, is fueling this trend.
She says that when people’s budgets get tight, people who take on side hustles have the option of slowly developing their business, taking time to develop products and building up their savings before making the leap to full-time business ownership. I reasoned.
The study found that while many startup founders quit their regular jobs at some point to focus on their new venture, 49% of employees who started a business as a side hustle are still working at their previous company. .
Another aspect Gusto asked respondents about is generative artificial intelligence, which is coming in late 2022 with the release of OpenAI’s ChatGPT.
Nearly three-quarters of surveyed companies using some generative AI tools used the tools for marketing purposes, such as building websites, building content, and creating content. The second most common use of AI is sales, with 41% using AI tools for that purpose.
Wilk believes rapidly evolving technology is also playing a role in the rise of side-hustle ventures, given how much AI tools can reduce these time-consuming tasks.
“I don’t think that explains all of the spike,” she told FOX Business. “But I wouldn’t be surprised if side businesses weren’t actually using generative AI tools to cut down on a lot of the time required at the start of a business when they’re actually trying to showcase their brand. Yes, let’s build a reputation and a source of income.”
