17 Million U.S. Small Business Launches In 2022, Intuit Predicts
Up to 17 million new small businesses will be formed in 2022 as the COVID-19 pandemic continues to inspire entrepreneurs and accelerate individuals’ plans to start their own business, a recent survey from Intuit predicted.
Admittedly, most of the launches could be single-person shops. Even so, some of the startups will be making hires, and most of the launches will need cloud services and multi-channel communications to engage customers. Translation: The startups could provide fertile ground for MSPs and channel partners — especially those that understand how to empower startup companies with business automation services.
Of those 17 million new businesses, an estimated 5.6 million will hire employees, the QuickBooks New Business Insights report, commissioned by Intuit, found. This projection, based on the U.S. Census Bureau data of employer identification numbers (EIN), smashes the previous record set in 2020 of 4.3 million, and is up 44% from the 2019 mark of 3.5 million.
“When the pandemic hit, we saw an unprecedented number of new businesses formed as millions of people spotted new opportunities brought on by the ‘new normal’ or reevaluated their priorities,” said Alex Chriss, executive vice president and general manager of Intuit’s Small Business and Self-Employed Group. “Now, almost two years later, we’re continuing to see this trend, as 2022 promises to deliver even more small business growth and prosperity.”
Small Business Insights: Top Priorities for 2022
Meanwhile, 88% of small businesses say online sales will be an important source of revenue in 2022, and 97% say digital technology will be important to their business, according to a the Small Business Insights report — a separate QuickBooks survey of 2,000 existing U.S. small business owners.
Entrepreneurs cite talent, digital optimization and preparing for macroeconomic issues as their top challenges for 2022, the Small Business Insights survey results also found.
.Attracting and retaining talent is a top concern for entrepreneurs, even as 44% said they plan to expand their workforce in the first quarter of 2022. In this case, the Great Resignation may be a boon for SMBs, as 78% of respondents cited benefits like close relationships with the owner(s), customers and a sense of belonging to the company as positive reasons to work for a small business, according to the survey.
To further attract new talent, 44% of owners said they are increasing pay while 30% are hiring younger workers than before, the survey revealed. To retain talent, 46% plan to increase pay for existing employees and 36% will offer larger bonuses.
Small Businesses Must Optimize for Online
A top priority for those starting a business in 2022 should be building a user-friendly website, with 40% of business owners saying “increasing online sales” is their top priority. And this isn’t limited to e-commerce businesses; 74% of brick-and-mortar businesses say online revenue is important. In addition to a website, social media is also proving to be vital for businesses, with revenue from social media accounting for a 33% of small business revenue, on average. Even brick-and-mortar businesses get 22% of their sales via social media, according to the survey results.
When it comes to the economy, almost all business owners and consumers (97% each, respectively) are worried about inflation. Among business owners, 45% cited “rising costs” as the largest threat their businesses face. To combat this, nearly two-thirds of business owners (63%) are planning to raise prices over the next three months. Other macroeconomic issues impacting small businesses include shipping and the supply chain, with 71% having experienced supply chain problems this year. The good news is that small business supply chains may be improving, as 62% of those that have experienced issues say their problems have already been resolved or that they expect them to be resolved soon, the survey revealed.
Finally, when asked about how they plan to fund their new business, more than two-thirds of entrepreneurs (67%) said they plan to fund their new business with personal savings and 49% will apply for a small business loan from a bank or financial institution, according to the survey.
You can read the full reports and results at the new Year in Small Business hub.