The last year and a half changed the way we do business because of so many people working from home. It’s also caused a spurt in freelance and self-employed business ventures. 2020 saw a record number of business formations and almost 1.6 million applications for EINs (new employer ID numbers).
A percentage of new business formations included corporate mergers, acquisitions, purchase of assets, real estate deals, etc. But many others were simply individuals who were using their time off to create alternative streams of income. And these figures continue to grow even as the pandemic eases off.
This trend is making it difficult for economists to understand what seasonal adjustments to make.
Most of these individual businesses include independent contractors as well as corporations or those who provide goods or services to customers. It’s known as the “gig economy.” People have opted for part-time work as rideshare drivers, delivery service, pet care, and various odd jobs like moving furniture or setting up television streaming components.
The pandemic has caused a spike in entrepreneurship, but new business owners may not understand the complexities of running their own business and should seek advice from their CPA before starting one.
Take the issue of health insurance. It’s easier for big companies to provide it for their employees but small companies often struggle with this.
Not all aspiring entrepreneurs have business management skills and need help with marketing, sales, planning and accounting. Acquiring capital is another problem. Those without fundraising acuity need guidance in that area.
Entrepreneurship is not for the faint-hearted. Kevin Thompson, CPA, is offering a “FREE” 30-minute interview for any person thinking of starting a new business or have started one to review their options.
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