The coronavirus pandemic caused much uncertainty around job security, especially for those who are self-employed. However, while some were in this unfortunate position, others were able to re-evaluate their work-life balance for the first time and create side businesses in addition to their main job during the lockdown periods. One prominent example is UK-based Verity de Yong, who used her love for cooking to transform kitchen scraps into luxury linens called “Ved Cooks”. Another example is Maisie Crompton, who started a tote bag business from just £25 and now earns thousands.
The increase in ‘bedroom entrepreneurs’ is a growth area for banks. The 2021 Financial Services Consumer Survey finds that those in full- or part-time employment are more likely to have a side business. In addition, data shows a high number of respondents (especially in the US) who have started their own business in the last two years and who are currently in full-/part-time employment.
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These bedroom entrepreneurs may not have considered the small business path before, but due to social media and the boom in ecommerce, they are finding it easier to reach new customers. Because of their relatively rapid success, they are looking for more than just a business account. They are looking for support, information on the next steps around business banking, and the opportunity to take their business to the next stage to effectively manage growth volumes. Across the globe, there are some strong examples of how financial services providers are helping micro-businesses.
In Belgium, credit agency microStart by BNP Paribas Fortis and Adie enables people without access to traditional bank financing to launch their businesses. NatWest in the UK advises on business plans and ideas for those in the starting phase through its ‘business builder course,’ which is suited to those in the idea phase or who are looking to grow. Other examples include Starling in the UK, which has succeeded in helping microbusinesses with the launch of a business toolkit, while Novo (an SME specialist digital bank) in the US has received additional funding to improve cash flow for small businesses once they can look for such opportunities, thus aiming to help micro-businesses as they grow quickly.
While recent partnerships and offerings from banks have resulted in more interest and subsequently more account applications for bedroom entrepreneurs, banks still have room to grow and improve around this area in order to acquire new micro-entrepreneurs and offer guidance and assistance. New businesses have the potential to grow and more so from the help given to SMEs from providers to reach business goals and provide the inclusion that newer micro-businesses are missing.
This article is written by Jaimini Pattani, Retail Banking Analyst, GlobalData
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By GlobalData
|
FT/PT* with a side business |
Total market sample size |
% in market sample |
Country population total |
Number of people in FT/PT* with a side business from total population |
|
|
Country |
|||||
|
Australia |
122 |
4,701 |
3% |
22,195,407 |
577,081 |
|
UK |
78 |
4,000 |
2% |
58,945,165 |
1,178,903 |
|
US |
135 |
2,000 |
7% |
283,834,156 |
19,300,723 |
|
Germany |
45 |
4,000 |
1% |
77,873,158 |
856,605 |
|
Sweden |
71 |
2,662 |
3% |
9,185,590 |
248,011 |
|
Hong Kong |
83 |
2,644 |
3% |
7,129,954 |
221,029 |
|
Singapore |
95 |
2,665 |
4% |
5,014,292 |
180,515 |
|
New Zealand |
62 |
2,354 |
3% |
4,369,388 |
113,604 |
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