Small Business & Entrepreneurship Council

By SBE Council at 26 August, 2025, 8:34 am

by Raymond J. Keating –

Two measures stand out as major positives for the state of entrepreneurship in America.

The first is growth in the most recent U.S. Census Bureau data on employer and nonemployer firms. As noted in the two following tables, the U.S. has experienced growth, including post-pandemic, in employer firms, and even more so in nonemployer firms – understanding the considerable lag in this data.

Second, the number of higher post-pandemic business applications (i.e., as explained by Census, “the business applications for tax IDs as indicated by applications for an Employer Identification Number (EIN) through filings of the IRS Form SS-4) is very encouraging. (See the following chart.) At least in terms of the employer/nonemployer data that we do have, there is a correlation between increased business applications and increased firms.

Source: Federal Reserve Bank of St. Louis, FRED

A recent article on the Harvard Business Review’s website (“How to Know When to Pursue Your Side Gig Full-Time” by Eddie Yoon, Christopher Lochhead and Katrina Kirsch) opened:

“The number of full time independent workers in the United States grew from 13.6 million in 2020 to 27.7 million in 2024, according to research by MBO partners. Eighty four percent are happier working on their own, reporting better health and security.”

But when to take the plunge into full-time entrepreneurship? The authors note:

“If you’re pursuing a side hustle that seems to be gaining traction, you’re probably grappling with this question yourself: Is there a way to calculate the right time to quit your day job?”

Noting that one size doesn’t fit all, their research and consulting on this topic has led them to suggest focusing on five questions.

● “Can cash flow from your side hustle sustainably exceed your main hustle?”

● “Does your superpower generate a 10x outcome?”

The authors explain: “A 10x outcome is a commonly used benchmark in management consulting; it refers to a client getting a revenue, profit or valuation result directly from your work that is at least ten times more than it costs. What’s your superpower? Defining this is essential—and not as easy as you think. Hint: it has nothing to do with your title, pedigree, or resume. Your superpower must be a unique ability that’s easily quantified in the marketplace by others.”

● “Do you have enough capital—and the right kinds?”

The authors identify three types of capital beyond financial capital: “Reputation capital is a track record of repeatable outcomes for a specific problem and the type of clients you are known for serving. Relationship capital is having three types of people in your corner, including those who can see the upside you overlook, loved ones who won’t lie to you, and fellow creators who love to jam with you. Intellectual capital is knowledge you have converted into an asset others can access, pay you for, and achieve outcomes while you are asleep. This can be books, courses, diagnostics, frameworks, or tools that you can monetize with no time or for an extreme price premium on your time.”

● “Have you mastered your emotions?”

The authors argue: “The hardest part of quitting isn’t inconsistent cash flow but the constant self-doubt, imposter syndrome, and loneliness.”

● “Does your commitment to your craft and mission exceed your need for kudos and money?”

The authors point on commitment is central to the decision to choose entrepreneurship, and in particular, full-time entrepreneurship. They point out: “You must be clear about and so committed to your mission that you are willing to walk away from money that doesn’t align with your mission. You must love the problem you solve more so than the solution you offer. This ensures you will have the perseverance to innovate and increase the odds of outcomes for your clients. Love of your craft and mission always leads to greater economic abundance.”

Yes, in order to take your side gig full-time, you need to be committed to a passion, a mission, a calling.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of “The Weekly Economist” book series, and 10 Points from Walt Disney on Entrepreneurship.