Keith Hall is the president and CEO of the National Association for the Self-Employed (NASE), which provides advocacy and resources for the nation’s self-employed workforce and micro-businesses. He shared what entrepreneurs need to know in order to succeed in the current economic climate and in the future.
President and CEO, National Association for the Self-Employed (NASE)
“It takes courage and perseverance to enter the ‘unknown’ of self-employment as opposed to the different level of security W-2 employment offers.”
Why are so many people quitting their jobs and deciding to start their own businesses?
Over the course of the last few years, the “Great Resignation” has transformed into the “Be Your Own Boss Movement” with a surge of new entrepreneurs joining the small business community. A trend that started in the pandemic, and is continuing still today, finds many American workers trading in their W-2 employment status for self-employment for either voluntary or involuntary reasons. Whether avoiding stepping into an unemployment line due to lay-offs or voluntarily deciding to start the small business many may have dreamed about for years, the growth in America’s small business community is transforming the American economy.
In fact, there has been a historic rise in Americans choosing to start small businesses. Through bravery, courage, and self-determination, a record-shattering 10.5 million small business owners submitted applications to the Small Business Administration just in the past two years.
Some Americans took the voluntary route in shifting to self-employment because they wanted to realize their life-long dream of being their own boss, and/or wanting the flexibility and work-life balance that self-employment offers.
As people during the pandemic began working remotely or virtually from home, they began to see some of the benefits self-employed workers experience. Flexibility, creating your own workplace dynamic and culture, living out your entrepreneurial dream, controlling your own hours, being your own boss — many of these are typical characteristics of being self-employed that the American workforce experienced en masse due to the pandemic’s effect on workplaces.
As we slowly came out of the pandemic, employers started to introduce “hybrid” work models to keep their employees happy, and from quitting due to the loss of working from home benefits. But, as this was unsustainable for many employers, a large number of traditional employees helped fuel the “Great Resignation” of employees who did not want to return to traditional office work and culture, rather opting to continue enjoying benefits and flexibility of working from home.
The best way to accomplish this outside of more flexible options from employers was creating and operating your own small business.
How have businesses that started since 2020 fared in comparison to the norm?
The pandemic of 2020 had a significant impact on the American small business community, including those in the self-employed demographic. A study conducted during the height of the pandemic by Facebook and the Small Business Roundtable, of which NASE is a founding member, found that a staggering one-third of small businesses started during this time closed their doors.
But the small business community, through perseverance and commitment, bounced back better than any other business demographic. Just a year after the pandemic started, an analysis by Pew Research Center found “the number of self-employed people in the U.S. had returned to pre-pandemic levels.”
This trend has continued through to today, but challenges do exist.
Almost three years after the pandemic, small businesses are still dealing with the lingering effects and impact, where our community is currently in a “repair and recovery” mode. Many small businesses didn’t survive. For those that did, they continue to experience a quickly changing economy, lack of available labor, and other repercussions likely to reverberate for years.
The recent record-breaking trend of the small business community’s growth has been fueled by small business booms across the country. For instance, in the Washington D.C. region, more than 260,000 small businesses were created in 2021 alone.
What do new or aspiring small business owners need to know in order to succeed in the current economic/social climate?
As rewarding as it is to be your own boss and operate a small business, it comes with a host of challenges and requirements, and you need a lot of determination:
- It takes courage and perseverance to enter the “unknown” of self-employment as opposed to the different level of security W-2 employment offers.
- It is important to have the support of your family and friends to weather the potential economic and social uncertainty that comes with being self-employed.
- You must also educate yourself and abide by important obligations that come with self-employment. From business regulations and tax requirements, there are a host of responsibilities small business owners regularly face.
- You need to understand the time commitment and self-motivating organizational skills that are required of this endeavor.
Meeting all these challenges head-on will allow you to enjoy all the rewards and benefits of exploring your true entrepreneurial spirit of being your own boss.
What resources should small business owners utilize to help their operations grow?
Small businesses are not alone. From how to start a new small business, to obligations and requirements, to general small business operations and financial support, there are many resources available.
Bookmark them, and return to them often, as they can be helpful in a variety of ways.
- The Small Business Administration (SBA): sba.gov
- The Internal Revenue Service (IRS): irs.gov
- The National Association for the Self-Employed (NASE): nase.org
In addition to the above, there are literally thousands of sites and organizations with resources as close as the click of a mouse. Never forget, as a small business owner, that you are never alone.