Finance & Economics

Majority of Young U.S. Employed Adults Consider Small Business Formation: article from JustWorks

A recent survey described in detail in the small business Formation article from Justworks has found that 6 in 10 employed adults (59%) are interested in starting their own business or becoming an entrepreneur. However, to achieve these goals, they need to overcome their biggest barriers: not enough money (39%) or knowledge (29%) to start. 

Majority of Young U.S. Employed Adults Consider Small Business Formation: JustWorks

Being your own boss is a type of American dream for many people. However, in times of ongoing economic uncertainty, some people would prefer the illusion of stability provided by the paid office job. 

A recent survey of employed adults and small business owners in the U.S. conducted by Justworks and The Harris Poll revealed that there are fewer people worrying about being laid off today than in 2023 (25% vs 42%). Moreover, those employed are more likely to consider starting their own business if they were to be laid off in 2024. In fact, nearly 1 in 5 people who have been laid off over the last 12 months did either start working as an independent contractor (19%) or decide to start their own business (18%). 

These findings are promising for the future of small business formation in the U.S. and other countries around the world as well. Small business owners are the backbone of many global economies. Therefore, most countries offer different types of incentives to spur the growth of local entrepreneurship. A large percentage of adults interested in becoming an entrepreneur signals a favorable regulatory and business environment. 

However, the path to entrepreneurship is not without its obstacles. Most aspiring entrepreneurs or other employed adults quote similar reasons for not creating their own startups:

  • access to capital (39%);
  • complicated tax codes (41%);
  • managing complex payroll challenges (36%);
  • unfavorable economic situation (22%);
  • not knowing where/how to start (29%);
  • lack of knowledge on running a business (25%).

These reasons are not ungrounded. Although the majority of small business owners eventually discovered that managing their own business was easier than they had imagined, a large share of respondents point out to the lack of helpful tools and resources. Thus, almost 90% of small business owners believe that without proper tools to manage administrative aspects of the business they had less time to focus on the core business.

Despite the challenges and uncertainties, 93% of small business owners would recommend entrepreneurial path to others, though most of them (80%) wish that there were better business management tools and resources to focus on their core business instead of administrative tasks.

Besides technical issues, people thinking about how to start a small business faced psychological barriers like fear of failing (59%). Nevertheless, such fears had less impact on younger employed adults (Millenials and Gen Z) who display higher motivation to start their own business. Moreover, if they could outsource the administrative aspects, this age cohort would be more likely to start a business.

Nina Bobro

1416 Posts 0 Comments

https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.