Updated: Aug 23, 2022
The Covid-19 Pandemic changed the way Americans do business. Virtual workspaces are now the norm as more and more people say goodbye to their offices for good. Millions of hard-working people started new careers altogether, and a sizeable cross-section of people decided to go into business for themselves for the first time.
Some first-time entrepreneurs started businesses because they recognized new and emerging trends as consumer behavior shifted during the pandemic. Others simply had too much time on their hands and wanted to stay busy.
We surveyed 130 people who started businesses, side hustles or created saleable digital assets during the pandemic. We asked them a bunch of questions to try and get a sense of the numbers behind their operations and figure out how the average pandemic entrepreneur is faring today.
Who are the Pandemic Entrepreneurs?
On average, about 15% of all people everywhere are entrepreneurial.
This statistic has held over multiple generations. It transcends every conceivable demographic, including age, gender, nationality, ethnicity, socio-economic status, and level of education.
The 130 participants in our study represent 45.94% of the total number of people who took our survey (283).
This percentage of qualified participants indicates a 3x increase in rates of entrepreneurship during the Covid-19 Pandemic.
Of those 130 participants who qualified for our survey, 92 started side hustles (73%), 35 started businesses (26%), and 19 created saleable digital assets (14%). It’s also worth noting that 21 participants (16%) had multiple responses to this question.
Among our general population of participants, 40 (32%) had graduated from college, and 24 (19%) had completed graduate school. An additional 30 (23%) report having attended college but not graduating.
The most common age group among the participants was 45-60, with 62 participants (48%) falling between those ages.
The next most common age group was 30-44 and included 27 participants (21%), with 18-29 finishing in third place with 25 participants (19%), and 16 participants (12%) were over the age of 60.
The gender breakdown among qualified participants was 46% male and 54% female.
What do the most successful participants have in common?
When we checked for commonalities among our most successful participants - those making over $200,000 per year - we noticed something interesting.
All of them reported earning income from side hustles, and in all but one case, that side hustle was ‘Day Trading.’
Two-thirds of them (67%) also worked at a day job, and the other third (33%) were self-employed.
None of them reported having any employees. However, 75% of them agreed that they would be interested in books, online classes, and other resources to increase their earning power.
The three most commonly used social media platforms among our most successful participants were Twitter, LinkedIn, and WhatsApp.
This statistic was an enormous deviation from the overall most-popular social media platforms among all participants: Facebook (57%), Instagram (38%), and YouTube (32%).
Our elite participants’ five most common business skills were: web development, mobile app development, cloud computing, marketing & branding, and Microsoft Excel.
In the past two years, 60% of our elite participants had purchased either Certificates of Deposit, Stocks & Bonds, or Real Estate Investment Trusts (REITs). However, only 20% of them invested in Cryptocurrency.
Our elite participants also seemed to agree on the three most critical interpersonal skills for succeeding in business: Negotiation, Communication, and Creativity.
Military service was also twice as common among our most successful participants (40%) compared to the general population of survey-takers (21%).
However, college and graduate school attendance rates were almost identical for both our elite participants and our general population for survey-takers.
For more information about how you can get started in Day Trading, check out: "Investing in Stocks and Cryptocurrency for Beginners."
The Most Common Side Hustles
The five most common side hustles among all survey participants were: eCommerce stores (30.65%), Amazon FBA stores (28.23%), Offline Methods (25%), Cryptocurrency (21.77%), and Day Trading (20.97%).
Among eCommerce store owners, 58% reported spending 8 hours or less on their eCommerce store every week; and 42% of them also reported spending less than $1,000 on start-up costs.
The success rate among this group was also unusually high, with 30 out of 33 people (91%) operating profitable businesses.
However, the degree of success among those 30 people did contain more significant variability.
We saw similar numbers with Amazon FBA store owners. About 69% reported working less than 8 hours a week on their Amazon FBA store.
However, the average start-up cost appears to be slightly higher, with 54% spending between $1,000 & $10,000 to get their store off the ground.
Additionally, 26% of Amazon FBA store owners also sold self-published books through Amazon KDP, and roughly the same percentage (25%) operated blogs.
Here is the complete list of income sources that our participants could choose from, as well as the percentages of participants who reported earning income by these various methods:
Ecommerce (30.65%), Amazon FBA (28.23%), Offline Methods (25%), Cryptocurrency (21.77%), Day Trading (20.97%), Online Freelance Platforms (15.32%), Amazon KDP (12.9%), Affiliate Marketing (12.1%), Blog Publishing (11.29%), Podcasting (10.48%), NFTs (10.48%), Print-on-Demand (8.87%), Teach on Online Course (8.06%), Dropshipping (8.06%), Flipping non-Crypto/NFT Digital Assets (7.26%), App Development (5.56%), Digital Art Creation (5.56%), and Saas Reselling (4.84%).
The Most Profitable Side Hustles
It is clear from our research that the two most common types of online businesses are Amazon FBA stores and eCommerce websites & businesses.
We wanted to better understand the numbers behind Amazon FBA stores compared to other eCommerce websites and businesses. So, we went to Flippa - the leading online marketplace for digital assets - and analyzed the top 10 most profitable Amazon FBA stores.
We looked at the age of the store, the monetization model, average monthly profit, EBITDA multiple, and asking price. We then gathered the same data on the top 10 most profitable eCommerce websites & businesses.
Our study did not include other assets for sale on Flippa, such as domain names, iOS Apps, or Android Apps. Furthermore, we made a point to exclude sponsored listings.
The average FBA store for sale on Flippa within our search parameters was only 3.9 years old and earned a net profit of $40,472/month.
These numbers dwarf even the most profitable eCommerce websites and businesses, which (on average) are 9.1 years old and only see a monthly net profit of $8.605.
The average asking price of the Amazon FBA stores we analyzed was a whopping $1,288,198, while the average asking price of an eCommerce website or business was only $286,415.
The most profitable Amazon FBA store we analyzed was three years old made a net profit of $156,076/month. It was for sale for $8,344,898 and had an EBITDA multiple of 4.5.
Again, these numbers dramatically overshadowed our study’s most profitable eCommerce website/business. That business was eight years old, earned a net profit of $23,606/month, and was for sale for $895,000 with an EBITDA multiple of 3.4.
The most common monetization method among Amazon FBA stores was Dropshipping. The top three most profitable Amazon FBA stores we analyzed follow the dropshipping model.
However, dropshipping was less common among the eCommerce websites and businesses we examined. Only 3 out of 10 eCommerce websites and businesses in our study followed the dropshipping model.
The average EBITDA multiple for Amazon FBA stores was higher, but not significantly. The average multiple for the Amazon FBA stores in our study was 3.08, and the average multiple for eCommerce websites and businesses was 2.94.
For more information on how to start your own successful Amazon FBA store, check out: "5-Step Guide to Selling Trending Products on Amazon."
Side Hustle Marketing
Social media was the most prominent marketing method among our survey participants by far.
Around 55% of participants reported using social media to market their businesses or side hustles. The second most popular method was “Offline Marketing” (40%), and the third most popular was “Influencer Marketing” (21%).
We saw similar breakdowns among eCommerce store owners, Amazon FBA store owners, affiliate marketers, digital asset creators, and our most successful survey participants.
The least popular marketing methods were: Affiliate Marketing (14%), Paid Search Ads (13%), and SEO (10%) which finished dead last.
When we asked the participants about other business-related purchases they would consider, SEO lost again, with only 19% of all participants showing any interest. The second-least popular answer was Public Relations Services (28%), followed by Paid Ads (37%).
The most popular answer was Books, Online Classes, and Other Resources for Professional Development (51%).
Interestingly, those numbers differed substantially among the web developers and marketing professionals who participated in the study.
Participants with a marketing background were significantly more likely to purchase Books & Classes (59%), Paid Ads (52%), SEO (33%), and PR services (33%).
The trend was even more profound among web developers, who answered: Books & Classes (67%), Paid Ads (67%), SEO (47%), and PR services (40%).
Prevalence of Professional Skills
We provided participants with a list of 33 professional skills and asked them to check off the ones that they possessed.
This list ranks their responses from the most common to least common skills:
Sales (29.03%), Microsoft Excel (28.23%), Customer Service (27.42%), Web Design (26.61%), Marketing & Branding (25%), Research (21.77%), Photography (21.16%), Cloud Computing (17.74%), Editing and Proof-Reading (17.74%), Mobile App Development (16.13%), Graphic Design (16.13%), Tutoring & Teaching (16.13%), Web Development (14.52%), AI Development (13.71%), Illustration (13.71%), Data Analysis (13.71%), Accounting & Bookkeeping (12.9%), Video Editing (12.9%), Social Media Marketing (12.9%), Computer-Aided Design (10.48%), Copywriting (9.68%), Voice-Over Acting (8.87%), Beta Testing (8.87%), Cyber Security (7.26%), Virtual Assistance (7.26%), SEO (7.26%), Videography (7.26%), Digital Animation (7.26%), On-Camera Acting (7.26%), Blockchain and Cryptocurrency Programming (6.45%), Transcription (6.45%), Journalism (6.45%), and Language Translation (5.65%).
For more information about which digital skills are the most lucrative, check out: "20 Marketable Skills You Can Learn Online."
Best Methods of Passive Income
We listed ten ways to earn passive income and asked our participants to check off the methods they had engaged in previously.
Their responses were:
Investing in Stocks & Bonds (42.24%), Peer-to-Peer Lending (26.72%), Investing in Cryptocurrency (26.72%), Investing in Certificates of Deposit (25%), Recovering Old 401(k)s (23.28%), E-commerce (20.69%), Renting Out Your Computer’s Processing Power (19.83%), Selling Digital Products (12.93%), Real Estate Investment Trusts (10.34%), and Affiliate Marketing (6.9%).
For more information about how you can earn passive income, check out: "21 Brilliant Ideas for Earning Passive Income."
The Side Hustles with the Lowest Start-Up Costs
When we asked our general population of participants how much money they had to spend on their side hustle before it became profitable, 46.92% reported spending less than $1,000.
We wanted to know more, so we took a closer look at that subsection of participants to see how they could turn such a small financial investment into a business.
Not surprisingly, the most common source of income among this group was eCommerce (33.8%), followed by Offline Side Jobs (29.31%), Online Freelance Platforms (18.97%), Cryptocurrency (15.52%), Day Trading (13.79%), Affiliate Marketing (12.07%), and Amazon FBA (12.07%).
Facebook was their most favored marketing method by far, with 56.25% of this subgroup using Facebook to market themselves. Instagram was second (31.25%), and Pinterest was third (18.75%).
When we asked them which interpersonal skills had been most instrumental in their success, this group answered: Creativity (52.46%), Communication (47.54%), Problem-Solving (40.98%), Patience (37.7%), Resilience (32.79%), and Research (27.87%).
Another surprising fact was that 85% of this subgroup had attended at least some college, and 23% had attended at least some graduate school.
In the final analysis, our study yielded the following conclusions:
The COVID-19 pandemic boosted rates of entrepreneurship by a factor of three.
Amazon FBA stores are one of the most profitable digital assets you can buy
Day Trading is one of the most profitable side hustles in existence when done correctly
eCommerce Websites and Businesses are some of the least expensive side hustles to start
Social media is the most popular form of digital marketing and yields the most consistent results
The general public doesn’t fully appreciate the benefits of good PR, paid ads, and SEO, but professionals do
Successful people invest their money; but not in Cryptocurrency
Approximately half of all successful side hustlers started their businesses for under $1,000 and dedicate less than 8 hours a week toward managing them
Investing in stocks and bonds is the most reliable means of passive income
To succeed in businesses, hone your communication and negotiation skills; and learn to think outside the box