More people than ever before are entrepreneurs, but small business owners are more likely to diversify their income because of stalling growth, underlining the need for policy makers to better understand this important and growing section of the economy.
Since 2010 the number of self-employed workers is up by over half a million people – a rise of 14.2 per cent. But is it boom time for entrepreneurs? Or are people branching out for themselves out of fear of another downturn?
A new study of online business sentiment by eBay suggests small business owners are spreading their bets when it comes to their finances against a still uncertain economic backdrop.
Of the eBay and other online business surveyed by YouGov, over half said they have additional sources of income or side businesses, heralding a new breed of ‘DISCO’ entrepreneurs (Double Income Small Companies).
With a quarter of small business owners making the shift to diversify their income in the past 12 months – up 7 per cent on the year before – these stats signal a clear sense of economic unease among Britain’s small business community when coupled with official data suggesting that the average income from self-employment has fallen by 22 per cent since 2008/09.
Tanya Lawler, VP of eBay in the UK, says that SMEs are rising to this challenge: “We are seeing more and more smaller entrepreneurs pulling out all the stops to achieve success. In fact, in the last five years the number of SMEs selling on eBay in the UK has grown by 61% to over 200,000 today.
“These businesses range from micro-businesses and DISCO homepreneurs through to businesses like Thingimijigs, which started with just an eBay account, £200 and a kitchen table and now sell branded gifts and accessories for kids globally from a purpose built facility. These diverse businesses are vital to the UK because they are the engine of our growth at home and abroad, with more than 4 in 5 SMEs on eBay in the UK selling internationally.
“Policy makers need to do more to understand this important and growing section of the economy.”
Outside of their primary online business, 36% have one other source of income, 16 per cent have two sources, one in twenty have three or four additional sources of revenue.
One such business owner is 32 year old Sanjay Aggarwal, the founder of Spice Kitchen, an online artisan food business run from the family home in Birmingham.
Since setting up on eBay in 2013, Spice Kitchen now processes up to 50 orders a day from more than 2,000 customers. But Sanjay continues to operate his own recruitment business alongside. He said:
“Running two businesses at the same time has its challenges. I changed the market I recruit in at the same time as starting Spice Kitchen to allow me to work from home more, so I can run both businesses simultaneously. I am constantly switching between both companies during the day and sorting out social media in the evening for Spice Kitchen.”
Another eBay business owner diversifying their income is the 27 year old founder of Nail Nation UK, Adam Kirby.
Adam combines running Nail Nation with his full time accountancy job. He said: “It’s tough to fit everything in. My wife helps a lot with the business and I get up at 4.30am to organise deliveries before commuting to my office job. Long term, we want to save enough money to open another business. In Nail Nation’s first five months of trading we made around £60,000. 2015 is going to be a really exciting year.”