Even as the Omicron variant of Covid-19 is sweeping the United States and the world, the spirit of entrepreneurship among Americans has remained strong. The QuickBooks New Business Insights report Intuit commissioned in November 2021 found that 57 percent of American employees want to set up a business, and 20 percent plan to do so in 2022. This equates to 17 million people and businesses.
While many of these businesses will be one-person companies, data from the U.S. Census Bureau forecasts that 5.6 million will be creating new jobs and hiring employees. This is higher than the previous record of 4.3 million businesses with employees put up in 2020.
Ironically, 83 percent of the potential business owners stated that the pandemic pushed their plan to start a business. It caused them to take a second look at their priorities. Some found a business opportunity online. People who want to start a business want to be the boss and take control of their future. They believe they will make more money than if someone employs them.
Eighty-six percent of them also believe that small businesses are crucial to the recovery of the U.S. economy. Already, half of them stated that they have been spending more money supporting other small businesses, and 57 percent intend to spend even more into 2022.
Get Business Insurance
Whether you intend to set up a one-person operation or hire staff, the U.S. Small Business Administration (SBA) emphasizes the need to get business insurance. Evaluate the type of business insurance coverage you need based on your business type. Some types of insurance are required by law.
All businesses need general liability insurance. This will provide funds to cover any business liabilities from lawsuits such as bodily injury, medical expenses, property damage, libel, slander, and settlement bonds, among others.
Commercial property insurance will provide funds if your business site gets damaged by covered events such as fire, storms, and vandalism, among others. Home-based business insurance is similar but is used for home-based businesses in addition to home insurance.
For businesses that sell products, product liability insurance provides funds to pay for liabilities caused by defective products. Professional liability insurance provides funds to pay for liabilities caused by errors, negligence, or malpractice for businesses that sell services.
A business owner’s policy combines most of the typical coverage choices in one plan. This is more affordable, and it also simplifies the entire process. Just make sure that it covers all your needs.
Remember to hire an insurance lawyer when you need to make a claim. If you file a claim without a lawyer, insurance companies routinely assess the lowest possible payout, and these can even be delayed. Having a lawyer to represent you will ensure that you will get the most out of your paying premiums.
Business Strategies for 2022
The QuickBooks Small Business Insights: 2022 report, also from Intuit, surveyed existing small businesses on their plans for this year. Ninety-seven percent expressed concern over inflation, and 63 percent intend to increase their prices in response. They added that digital technology would continue to be vital for businesses, and 88 percent stated that online sales would be an essential source of revenue. Those omnichannel businesses that integrate online with offline sales expressed the highest optimism.
A state-of-the-art website and a well-targeted social media presence are requirements for success. Their social media accounts drive an average of 33 percent of the revenue of small businesses. Even the physical stores of businesses get 22 percent of sales from their social media campaigns.
In terms of priorities, 40 percent will focus on boosting online sales, and 39 percent will work to improve the results of marketing efforts. The development of new products and services ranks third at 32 percent, followed by investments in new technology at 31 percent. In fifth place at 29 percent is to hire new talents.
A survey by the accounting software platform Xero showed that because of rising costs from inflation, small businesses plan to reduce spending in 2022. More than half or 56 percent are facing pressure from a tighter cash flow. Any further investments they make into the business will be cautiously weighed. They will also carefully ensure that they do not fall into the trap of too much debt.
The global disruption in the supply chain that affects almost all industries is still a major challenge. Small businesses will be planning and making purchases much earlier than needed to ensure that there will be no gaps in their inventories.
Because of the many challenges they face, 40 percent of small business owners expressed concern over their mental health and the well-being of their employees. They are, therefore, including measures to address these issues in their plans for the year.
If all new business owners are as well-informed and prepared, setting up a new business in 2022 will be starting on a stable foundation. These entrepreneurial projects will provide the energy for the country’s ongoing recovery.