Side Hustles Are Driving New Businesses, Entrepreneurship: Report
The number of small businesses created by founders who already had a job nearly doubled from 2022 to last year.
A new survey of 1,345 business owners from payroll company Gusto found that 44% of new businesses in the US started as side hustles in 2023, a jump from 27% in 2022.
A quarter of respondents said they were working full-time day jobs while starting their companies, and 19% were working part-time jobs.
“Uncertainty around which way the economy’s going made people a little skittish to give up something they’ve got in order to go for something that they want,” Gusto’s principal economist Liz Wilke explained to Bloomberg.
Hybrid and remote work could give employees the space, and time with the lack of a commute, to explore their entrepreneurial potential, according to Wilke.
Generative AI, like OpenAI’s ChatGPT, which came on the scene in November 2022, could have also helped business owners set up their ventures and develop products faster last year.
The survey showed that more than 20% of new companies are using generative AI tools, and 76% of them are using them for marketing. A smaller number (41%) are using AI to better communicate with sales leads, and 26% are using it for customer service.
“I don’t think [AI is] accounting for all of the jump,” Wilke told FOX Business. “But I wouldn’t be surprised if side hustlers weren’t really using some generative AI tools to cut a lot of the time commitment that’s required at the very start of a business when they’re really just trying to their brand out, get a reputation, build some revenue streams.”
The younger the worker, the more likely they were to start a business as a side hustle. The survey showed that nearly half (49%) of founders 25 to 34 years old were working for someone else while starting their own businesses. Over half (51%) of that age group was still working for that company at the time of the survey.
In comparison, 42% of the 35-44 age group, 43% of the 45-54 age range, and 38% of the 55 or older age group said they had a job while starting their companies.
