A new survey from The Hartford found that 25 percent of Americans, which equates to approximately 57 million people, own a side business (a business that is not their primary source of income). The majority of side business owners surveyed have full-time jobs and the primary reason for starting their business was financially motivated as opposed to a small percent who are pursuing a passion.
Profile of Side Business Owners
About half of side business owners surveyed dedicate on average 10 hours or fewer per week on their business (49 percent) and most are employed elsewhere full time (61 percent). About half of those with a full-time job (51 percent) said they have used at least some of their vacation time or paid time off from their primary job to work on their side business.
Baby Boomers (38 percent) and Gen X (33 percent) are more likely to own a side business than Millennials (26 percent). Regardless of age, 61 percent of survey respondents overall said the primary reason for starting a side business was financial, which is slightly higher for Millennials than Gen X and Baby Boomers.
Primary Reason for
|Overall||Millennials||Gen X||Baby Boomers|
|Financial||61 percent||72 percent||62 percent||56 percent|
|Make a change/lifestyle||16 percent||18 percent||20 percent||19 percent|
|Pursue a passion||9 percent||7 percent||8 percent||12 percent|
Many of those surveyed (43 percent) generate less than $5,000 of income in a typical year, followed by 18 percent who generate $5,000-$10,000 and 18 percent who generate $10,000 to $30,000.
Protecting Their Income
Despite being in it for extra income, only 12 percent of those surveyed have purchased insurance for their side business and most don’t think they need it. The top three reasons cited for why they don’t purchase insurance include:
- I don’t need business insurance (44 percent)
- My business is too small to warrant buying insurance (18 percent)
- I am protected by my current home or auto insurance (11 percent)
Staying a Side Hustler vs. Taking it Full Time
Although the small business owners surveyed are looking to make extra income, it is not enough to take their business full time. The survey found that only 27 percent of side business owners are somewhat/highly likely to say their business could become their full-time job or primary source of income. Thirty-three percent said it is highly unlikely.
The greatest barriers to making their side business their primary source of income or full-time business are financial:
|Top five barriers to making a side business their primary source of income or full-time business:|
|I don’t believe I can make a living at this business||48 percent|
|I can’t afford to give up my income from my full-time job||33 percent|
|I don’t want to give up the benefits from my full-time job||27 percent|
|I like my full-time job and don’t want to give it up||23 percent|
|I don’t have the time to dedicate to the business||13 percent|
The Hartford’s 2018 Side Business Survey was conducted online with an online research panel between May 7-15, 2018 using a nationally representative sample of 4,135 U.S. adults who were at least 18 years of age. The sample was screened to determine whether or not individuals currently have a side business. The 1,033 individuals who stated they have a side-business participated in a survey about their current side-business. Among the remaining 3,102 who do not currently have a side-business, 989 participated in a survey on future side-business intent. The margins of error are ±3.1 percentage points at the 95 percent confidence level for both samples.
Source: The Hartford
Was this article valuable?
Here are more articles you may enjoy.