With hundreds of new businesses in 2023, a good number of Ghanaians are embracing the idea of running their own businesses than ever before.
A lot of people dream of being their own bosses. The flexibility to set your own hours, the autonomy to choose what to work on, and the power to reap the rewards of your work are all powerful motivators. For many, this aspiration remains just a dream. But in the past two years, the effects of the pandemic and the rise of flexible working have pushed millions to start businesses where they can be their own boss. The vast majority of these businesses are small ones—those with 5 or fewer employees.
This is why a lot of people are starting new businesses
The shift to a remote economy has created a clear opportunities for entrepreneurs. There is also the lower barrier of entry to filing new business applications, more people loosing their jobs, and an overall shift in how people think about work.
It is easier than ever to start and manage an online business. An online survey of 200 online small businesses found that a majority (63%) of new businesses require less than GHS 1,000 to get started. Services like QuickBooks, LegalZoom, and other online platforms make business administration cheaper and easier to manage, and platforms like Upwork and Fiverr have made it easier to find and manage clients.
For many, a new online business serves as supplement to their incomes. According to the same online survey, 80% of businesses were started by people who were already employed in a full-time job. They found that 44% of these online businesses make less than GHS 2,000 a month, 32% make between GHS 1,000 and GHS 4,000, and 25% make more than GHS 4,000 a month from their business.
For others, a new business is their full-time job. Sectors with the highest increase in business applications also saw some of the heaviest employment losses in the initial months of the pandemic. The hospitality industry particularly stand- out. This suggests that many of the people who lost their jobs at the outset of the pandemic turned around and started their own businesses, perhaps aided by some governmental or non-governmental organization.
There is no question that the pandemic has contributed to the rise in new small businesses. People who for years had thought about venturing out on their own were shut in their homes for months. It gave them time to wonder what life could be like if they made the leap and built something of their own. The shift to remote work, hastened by the pandemic, fundamentally changed what is possible for many workers.
In his study of this trend, economist John C. Haltiwanger said, “I do not think any of us had a clue that we could do so much business activity remotely. That sparks all kinds of new ideas.” These changes inspired people to embrace new ways to take their companies digital and serve their communities in new ways.
These changes also prompted a strong desire for flexibility as employees sought to find new ways to balance life and work. Running your own business is the ultimate flexible work option, allowing people to choose their own hours, where they work, and with whom, as well as the type of work they do.
Encounters New businesses must face
Creating a small business that thrives continuously is a major challenge, and unfortunately, the numbers are not encouraging. Studies have shown that two thirds of small businesses last just two years, and about half last more than five years. The longevity of businesses without employees is tougher to track. They can exist for years without generating meaningful income.
And despite the resources available, the logistics of starting a new business can still present challenges. According to Go Daddy, 63% of business owners said they need help with marketing, 35% said they needed access to capital, 28% said they needed help in getting online, and 24% said they needed assistance with management and planning.
Operating a new business can be isolating, especially when working exclusively from home. Co-working spaces can help add structure to the day and provide networking opportunities. Horizons Offices can help entrepreneurs bring their businesses to the country and the world as a whole. And for those with employees, a private serviced office gives new teams a space to collaborate and develop culture, both of which are critical for any business.