According to the Census Bureau, more than 4.4 million new businesses were created in the U.S. during 2020 — the highest total on record. Half a million new businesses were started in January 2021 alone.
Salesforce.com
Woo-Hoo! Right? Well, what these statistics don’t highlight is that starting a small business is not for everyone.
In fact, according to data from the Bureau of Labor Statistics, approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed. By the end of the fifth year, about half will have failed. To accurately define failure, we mean the business no longer exists.
Investopedia.com
Ouch!
Of course, there are benefits to being a small business owner.
Advantages of Starting a Small Business
A few of the advantages of being a small business owner are
- the tax benefits,
- enjoying the flexibility of your time,
- personal satisfaction, as well as
- legitimizing and monetizing your expertise.
Disadvantages of Starting a Small Business
However, small business ownership comes with a set of difficulties that many may not consider, including the significant commitments involved. There may also be substantial financial and time commitments, not to mention all the many hats an owner wears.
Starting a small business can be overwhelming for many, especially if they don’t have the right mindset or access to capital, and their perception of business ownership is not grounded in reality.
There is an alternative.
The Gig Economy
The gig economy is something to consider. Though the term “gig economy” is relatively new, these nontraditional work arrangements have been around for a long time.
A study by the American Staffing Association found that most Americans (78%) see the gig economy as a new way to describe the participation of this longstanding independent workforce. Back in the day, we used to call it “temping.”
Gigonomy.info
Advantages of Gig Work
Gig work is a great place to get your feet wet before starting a small business.
According to Flexjobs, gig workers work as short-term, temporary, or independent contractors for one or a variety of employers (though they are not employers in the traditional sense).
No matter what industry a gig worker (or freelancer) is in, the gigs consist of small tasks that the worker completes. These tasks can be from picking up and delivering food (like DoorDash) to graphic design to virtual assistant services.
A freelancer can choose to work for a set amount of hours (like selecting a shift) or work by the project. Once the task or gig is complete, the freelancer moves on to the next gig. That might be another task with the same customer (company, business, person, etc.) or something entirely different with another customer.
Disadvantages of Gig Work
Some things to consider with gig work are lack of benefits and inconsistent income. As a freelancer, you most likely won’t have health benefits, and you will have to provide that for yourself.
Also, with most gigs, you’re paid for the project or task. So, while you are free to choose how and when you work, you may have limited control over how many jobs may be secured in a given day or week.
Determine Your Commitment Level
Gig work versus business ownership is like dating versus marriage.
It is sensible to date first to see if a person is right for you before entering into a marriage.
The same is with doing gig work before starting a business. You get to experience a low level of commitment when providing your service before jumping into the deep end of business ownership. You can still experience the benefits of flexibility while trying out something new without a full-fledged obligation.
Leverage Gig Work
Using gig-work to test a new skill or an old passion or adding extra income to your bottom line every month may be the right choice for you.
For example, suppose you love baking. Instead of opening a bakery and taking on all the added responsibility, you can sell your baking services online or take orders from your friends and family to start.
Get Started Gigging!
So, if you are ready to start making some extra cash or test the waters before taking on the significant responsibility and commitment of starting a business, listing a gig on online marketplaces like DPGIGS.com is a great way to get started.
Best wishes and happy Gigging!
Comments
Sure. It was with me too. We can communicate on this theme.