5 New Business Trends to Look Out for in 2023

As we enter 2023, business owners and employees of all types are continually adjusting to a market landscape greatly impacted by recent global turbulence.

In just a short couple of years, we have witnessed the financial instability and technological adaptations that have followed a worldwide pandemic and cost of living crisis. Now, we are looking at a looming recession. 

More people than ever are looking for ways to expand their incomes, secure their financial footing and increase their resilience to future volatility. After all, in business, the ability to adapt and pivot sustainably through times of change can mean an opportunity to thrive. 

To put this into perspective, Quickbooks has asked people across the country what their entrepreneurial plans are for the year ahead. Their answers have revealed much about what the business world could look like in the coming year. 

With this in mind, here are 5 business trends to look out for in 2023.

Trend 1: More new business owners than ever

One key business trend to look out for in 2023 is the rise of new businesses. According to new Quickbooks research, more British adults than ever plan to start a new business this year. Namely, around 1 in 3 (34%) reported a desire to take the reins with an entrepreneurial enterprise.  

This represents a significant 24% increase on 2022, when only one in ten (10%) responded with the same answer.

What’s more, despite the potential challenges of a recession, more than two thirds (69%) of people looking to start a new business are confident that it will succeed. 

Of course, life’s obstacles can get in the way and not everybody will follow through with this inclination to create a new business. But even a small percentage increase in the number of people starting new businesses can have implications on a wider scale. 

For example, in highly competitive industries, a rise in the number of start-up businesses could increase market saturation, with existing businesses being increasingly challenged for their share. This also has an impact on resources, as the greater utilities needed to help a business run, the greater the strain across the board. 

However, an influx of new businesses can also be great for the consumer. In any market, a diversification of products and services can boost the local economy and potentially help each individual business thrive. It can also help to drive the job market. 

Trend 2: More side hustles as a secondary income

When it comes to prospective new business owners and their motivations for starting a new venture, our research found overwhelmingly that most were looking for side hustles, as opposed to a full-time focus.

In total, 84% of people questioned said they would continue to work for another employer full-time or part-time should they start their business. Just 16% planned to make the jump to go it alone. 

When asked why they were searching for a secondary income, 42% of people said their desire to start a new business is to give themselves a more lucrative income stream as the cost of living crisis and recession bites. Whereas, 43% simply want to try something new.

Interestingly, although we may think of the recession as having a discouraging effect on potential business ownership, it may have had the opposite effect.

For, people who were already thinking of starting a business may have been pushed on by the realities of the current economic climate. In our research, more than half (56%) of people said inflation means they need to boost their income, while 42% directly said the recession means they need to protect themselves financially.

So, in 2023, expect more and more standalone ventures being created as a source of secondary income. It’s clear that many people have been spurred into action by the threat of recession and rising inflation, and think that a side hustle is necessary.

Trend 3: New businesses filling gaps in the market

One of the main considerations when starting a new business is whether there is a place in the market for the business to thrive in. This is especially pertinent in periods of inflation or recession, as it’s important not to squander any investment.

Luckily, 40% of future business owners questioned believe they have a business with strong customer demand regardless of economic outlook. Indeed, almost a third (32%) have invested time into getting pricing right to make it competitive for customers.

While this is promising, perhaps an even more optimal situation for new business owners is to find a gap in the market - in other words, a service or opportunity with customer demand that is not being met with current consumer-facing options. 

And, in our research, 30% of respondents believe they have found a genuine gap in the market, which has a number of positive implications.

For one, should they be correct, it means there are a lot of services out there that are waiting to be catered to. 

Not only is this good news for any future business owner who is looking for a niche, but profitable, market - it could also give the service-based economy a boost. After all, a service not being fulfilled is a purchase or transaction not being made. 

These results may be a direct consequence of the post-pandemic culture of adaptability and innovation. Since the Covid period, businesses have needed to swivel and adapt at a moment's notice, in a way they had never before.

Couple that with the technological advancements making businesses easier to start than ever, and it’s not hard to imagine 2023 being a bumper year for start-up.

Trend 4: Significant self-funding

New business owners’ unshakeable belief in the ability of their business to succeed is one of the most noticeable business trends of early 2023. 

This confidence among new business owners is reflected in their willingness to fund their businesses themselves, with 70% planning to use their own money savings and a quarter (24%) planning to use a loan from family and friends.

In the early stages of a business, this is a common course of action and is often necessary to some degree - even in the online sphere, it takes funding to set up software and to obtain hosting rights. 

Altogether, just 15% of people in Quickbooks’ research plan to use government funding for their business.

There are positive aspects to this desire to self-fund. To start with, a relatively small number of people planning to use government funding means less borrowing from banks or investors. It also gives prospective owners greater control over what they are spending and when. 

However, due to the nature of self-funding, there is an inherent risk that, should the business not perform as well as hoped, any investment made will not be recouped. That’s why it is always crucial for new business owners in this position to carefully assess their financial position and whether they can realistically afford the expenditure.

Trend 5: The continuing rise of e-commerce

Lastly on our list of the biggest business trends to look out for in 2023 is the rise of self-made e-commerce businesses. 

More than a third of potential new business owners in Quickbooks’ research have said that technology has made it easier to start a business (37%), and this is reflected in the types of businesses they’re starting.

43% of these businesses will be e-commerce businesses with income from online sales, which suggests that this particular type of business is going to prove very popular in 2023. 

An increase in new e-commerce businesses can mean a number of things. For one, the e-commerce market in most product categories is highly competitive, and more new businesses may increase this competition even further. 

Then again, e-commerce businesses, as the virtual version of shopfronts, have a supply-and-demand economic model by nature. This means they may contribute more to economic growth than some others, like a creator or influencer led businesses. 

More new e-commerce businesses also means new product variations, which can help to give consumers more choice and promote a healthy market.