The cost-of-living crisis is leading more people to set up a “side hustle” alongside their main job, according to new research.
The survey for Direct Line business insurance found that 25% of people setting up a new venture outside of their main job were doing so specifically because of the cost-of-living crisis.
Around 41% of new entrepreneurs started their side hustle to generate extra income to supplement their lifestyle, while 17% said that they wanted to pursue a new passion or hobby.
Another 15% said they did it because they had more time on their hands due to hybrid working.
The research, carried out by Opinium, revealed that the most popular sector for new side hustles was retail/wholesale which included businesses selling fashion, clothing and textiles. It accounted for 10% of new ventures already set up or about to be set up this year.
This trend matches growth reported by on-demand garment printers such as Printful and Inkthreadable which have thrived on the back of more people setting up online clothing retail businesses over the past two years.
Retail/wholesale was followed by IT or web design (9%), arts and crafts (8%), education/training (7%), engineering (6%), business/management consultancy (6%), financial services (5%), hair and beauty (5%), advertising/marketing/PR (5%), healthcare (4%) and cleaning/gardening (4%).
When asked what the best thing about managing a side hustle was, 48% said it was earning an extra stream of income, 35% highlighted the flexibility of working hours, 29% said the ability to be their own boss, and 21% stated the ability to control the creative direction.
New entrepreneurs said their side hustles had allowed them to learn new skills such as marketing a business (29%), social media (29%), accounting (28%), tax returns (27%), basic legal issues (25%) and how to create a website or graphic design (19%).
These new skills have been acquired through doing “external research” (28%), taking courses and exams (25%), listening to podcasts and/or YouTube (24%), speaking to friends and family (24%) and learning from social media community groups (21%).
The survey noted that 93% said that having a side hustle had been a positive experience in their life.
Alison Traboulsi, product manager at Direct Line business insurance, said: “This latest research shows that many consumers are responding to feeling the squeeze by setting up new side hustles – and it’s great to see that they’re not just enjoying running their own businesses but that they’re gaining valuable new skills too, such as marketing, social media and accounting.
“Setting up a side hustle requires financial and emotional investment so it’s important that entrepreneurs don’t put their new ventures at risk by not taking out comprehensive insurance protection. At Direct Line, we’re committed to helping small business owners and side hustlers set themselves up for success by helping to give them the peace of mind that if anything were to happen, they have the right insurance arrangements in place.”
