The number of small businesses created by founders who already had jobs nearly doubled from 2022 to last year.
A new survey of 1,345 entrepreneurs by payroll management firm Gusto found that 44% of new businesses in the U.S. started as side hustles in 2023, an increase from 27% in 2022.
A quarter of those surveyed said they held full-time day jobs while starting their company, and 19 percent said they held part-time jobs.
“The uncertainty about where the economy is going has made people a little nervous about giving up something they have to go after something they want,” Gusto chief economist Liz Wilke told Bloomberg.
According to Wilke, hybrid and remote working could offer employees the space and time, without commuting, to explore their entrepreneurial potential.
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Generative AI, such as OpenAI’s ChatGPT, which entered the scene in November 2022, could have also helped entrepreneurs launch their ventures and develop products more quickly last year.
The survey showed that more than 20% of new companies use generative AI tools, and 76% of them use them for marketing. A smaller number (41%) use AI to better communicate with sales leads, and 26% use it for customer service.
“I do not think so [AI is] taking all the leap into account,” Wilke told FOX Business. “But I wouldn’t be surprised if secondary scammers aren’t actually using some generative AI tools to reduce a lot of the time commitment involved in starting a business when in reality they are just trying to get their brand out there, gain a reputation, build some revenue streams.”
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The younger the worker, the more likely they are to start a business as a sideline. The survey showed that nearly half (49%) of founders aged 25 to 34 worked for someone else while starting their business. Over half (51%) of people in that age group were still working for the company at the time of the survey.
By comparison, 42% of the 35-44 age group, 43% of the 45-54 age group, and 38% of the 55 or older age group said they found work while starting their company.