QuickBooks Survey Indicates Small Business Entrepreneurship Will Continue Strong in 2023
New research from Intuit QuickBooks shows that small business formation continues at historically high levels, as inflation and the high cost of living motivate Americans to start their own businesses.
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What you need to know: This trend is expected to continue in 2023, with two-thirds (66%) of survey respondents who say they plan to start a small business, with inflation and the need for additional income being behind their decision.
These findings and more are featured in the QuickBooks New Business Insights report, based on a recent survey of 15,200 US adults commissioned by Intuit, the makers of QuickBooks.
Key metrics: The report also uncovered several geographic trends related to business formation and where small business economic activity in the US flourished in 2022 and is expected to increase in 2023:
- Business formation continued to hover at a historically high level in 2022 with several states leading the pack: The states where the most residents reported starting a new business were Delaware (23%), Hawaii (22%), New Jersey (21%), Virginia (21%), and Maryland (20%).
- These states are poised to lead the country in small business formation in 2023: The states with the highest number of residents who said they plan to start a business next year are New Jersey (42%), Florida (40%), Hawaii (40%), California (39%), Louisiana (38%), Maryland (38%), Georgia (37%), Nevada (37%), New York (37%), Delaware (37%), and South Carolina (37%).
- While small business formation is at historically high levels, many of these new ventures will be side hustles: Creating a new small business as a side hustle is continuing to increase in popularity as people look to supplement their income amid inflation. Almost two-thirds (65%) of respondents indicated that they will continue to work for other employers at the same time as managing their new business ventures, suggesting that side hustles are increasing in popularity as people look for more income opportunities, particularly amid inflation.
What they said: “As we navigate the small business landscape post-pandemic, we’re seeing increased business formation as people look for new revenue sources and opportunities in a changing economy,” noted Alex Chriss, executive vice president and general manager of Intuit’s Small Business and Self-Employed Group.
“With an increase in small business creation, it’s imperative that we support them with the tools they need to successfully run and grow their business, especially as a majority of them lean into ecommerce, online lending solutions, and digital tools to gain customers and manage cash flow.”
Technology Matters to Small Business Owners
Technology, and its ability to simplify many aspects of starting and running a business, continue to be a key driver of small business startups.
- Technology has made it easier than ever to start a business: 45% of those surveyed indicated that the opportunities technology platforms enable is a key reason they decided to start a business.
- Ecommerce opportunities are seen as the most promising growth opportunities: 46% said that they would pursue an ecommerce business as their new business venture, and 37% plan to pursue a job in the creator economy, driven by social media apps and services.
- Accessing funding is a top priority for new business owners: While the majority of those surveyed (73%) indicated they’d use their own money or savings to start their businesses, roughly one in six (17%) said they will look to online lenders as an option, and more than one in five (23%) would consider a traditional bank.
Where to get more information: This report and additional research and insights from Intuit QuickBooks are available here.
Intuit is a global financial technology platform that makes QuickBooks, TurboTax, Mint, Credit Karma, and Mailchimp, empowering small business owners to succeed.
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Editorial Note: This post is from a Company Press Release and may have been modified for clarity.