The rise of self-employment in 2025

Side hustles have existed for decades, but the concept of working on projects outside of a regular job has gained popularity in recent years. The COVID-19 pandemic particularly prompted many to begin side hustles when finances and work became much less stable. However, the work trend has continued to flourish, with many enjoying the flexibility and independence it offers. In the ‘Entrepreneurship in 2025’ report from Intuit QuickBooks, 3,000 consumers and entrepreneurs shared their insights for the year ahead. The Entrepreneurship research revealed that 52% of respondents were considering starting a new business in 2025, with 40% saying their business would be a side hustle while working for another employer. These findings suggest that the self-employment landscape will likely see huge growth in 2025. Starting a business in your spare time can allow you to flex creative muscles not used in your day job and help grow your bank account. However, there are a lot of factors to consider before taking this step, especially if you plan to make it a full-time operation one day. In this blog, we’ll explore why so many Brits are pursuing side hustles, what keeps them at their employed job, and how to make the step to being fully self-employed.

The top reasons for starting a side hustle or going self-employed 

The report found that the leading reason for starting a side hustle among those who currently have or previously had one was self-determination — 41% said they loved working for themselves and being their own boss. Similarly, 35% said they wanted to stretch themselves, with self-employment pushing them further, and 19% said it was more fulfilling. Of all business owners (current and previous), 42% said they wanted to pursue a passion. However, as the UK’s cost of living continues to leave most strapped for cash, finances were a huge motivation. Among all survey respondents, 57% said earning more money would make them more satisfied with their life, and nearly half of the business owners started a business to become financially independent. Of those with side hustles, almost a quarter said they could only make ends meet through self-employment gigs and a similar percentage needed multiple jobs to help cover housing costs. Another 17% said they pursued side hustles to pay off credit card debt, and 9% cited student loan debt. Unfortunately, a small percentage said they were initially forced into self-employment after losing their jobs.

Why do side hustlers continue working for employers?

Many begin side hustles to follow their passion and further their career, but it’s not always possible to pursue full-time. Among the current and previous business owners of side hustles, the top reason to remain employed was to have a stable income. A quarter also said it provided a safety net or launch pad for their business. However, it wasn’t just about the regular pay cheques, as 39% said they remained employed for the workplace benefits. According to Ciphr, paid sick leave is the benefit that employees value the most, followed by flexible working hours and pension contribution matching. The security of a retirement plan was another motivation for 37% remaining employed. Lastly, for 29%, the sociable element of working for another company and being part of a team kept them working at the business. 

The pros and cons of side hustles and full-time self-employment

When deciding whether to keep your business a side hustle or turn it into a full-time business, it’s important to consider how both options could impact your life.

High financial risk for high reward

Without a long-term contract, there is generally more financial risk in self-employed jobs. It’s common for self-employment income to fluctuate with seasonal changes, industry trends, and business results. While full-time salaries remain regular, self-employed income will likely vary throughout the year. However, the earning potential for self-employed individuals is far higher as you can often set your own rates. There’s also the option to take on more work to increase the income, whereas employees will receive the same amount regardless of work output unless they’re paid for overtime or receive commission.

Unpredictability vs stability 

Until a business is fully formed, work will likely remain sporadic, making it hard for self-employed workers to plan far ahead in their personal lives. This unpredictability may work for those who like variety and spontaneity, but those who need security and structure may struggle with a self-employed lifestyle.

Work-life balance

While those employed must abide by the working hours in the company’s policy, self-employed individuals can set their own hours. Our survey found that 34% of current and previous business owners created their own companies to have more flexibility in their schedules. A quarter of all respondents also said increased time off would make them more satisfied with their lives. However, this ownership over time can have good and bad impacts on the work-life balance depending on how it’s managed, especially in the early stages of the business. Due to the lack of security in self-employment, some may accept any work that comes through, even if that means losing free time, just to ensure income. However, once a business is established, self-employed workers should hopefully have the option to work when best suits them. Even then, self-motivation and discipline are key to sticking to your schedule. Of course, the work-life balance will likely be out of whack for those keeping their businesses as a side hustle, using free time to pursue the additional income.

Working solo or as part of a team

For some, the idea of working independently without office politics is the ideal setup, but for others, it could dwindle their productivity. Those who work best on their own without the distraction of others will likely thrive in self-employment, but those who need to be part of a team may prefer staying employed. However, it depends on the type of work, as some self-employed jobs like consulting involve visiting workplaces and working with others temporarily.

What to consider before starting a business 

When starting any type of business, whether a side hustle or full-time self-employment, there are several areas to consider before making the leap.

Financial health

It’s crucial to assess your current financial circumstances and whether you can afford to take on monetary risks while a business is in the early stages. All businesses will likely face some kind of financial hardship at some point, whether it’s related to the market, economy or business performance. Inflation was cited as causing the most harm to businesses in the survey, and nearly half of those who started a business at least five years ago think it’s harder to start a business today. So, it’s not recommended to start a business full-time if your finances are already poor. Gradually moving towards full-time self-employment, as many have admitted to doing, is a helpful way to lessen the financial pressure. If possible, having savings is ideal before committing to being fully self-employed to allow yourself some wiggle room. 43% of respondents said money held them back from starting a business or made it harder, suggesting building a savings pot isn’t an option for many. The annual take-home income most respondents said they would need before leaving their other job was £50,000. However, the current gross annual revenue from businesses or self-employment was most commonly between £5,000 and £24,999. Self-employed individuals could also look into various loans to cover costs like equipment purchasing and cash flow management. Business loans can involve more thorough credit checks and require collateral, whereas personal loans are sometimes more accessible but often have higher interest rates.

Find out more about starting a business with no money.

Business knowledge 

A third of all survey respondents said they would start a business if they had stronger business acumen. However, understanding and handling business situations is a skill you can learn. From reading books and researching your chosen industry to taking online courses and getting a mentor, you can expand your knowledge. Once you’ve built a solid business sense, you need to have a full understanding of how it would apply to your business before going fully self-employed. For example, outlining the business strategy and understanding the target market. While you can expand your knowledge and become prepared, it’s likely your business acumen will improve further as you’re running the business. Some scenarios are difficult to plan for and require reactive thinking.

A business idea

While flexibility and financial independence are key incentives for self-employment, a strong business idea is still essential to success. If you’re trying to think of an idea, start with your skillset, experience, and knowledge — what work is achievable for you to do successfully? You’ll also need to consider whether the idea is within your capabilities, budget and resources. If you want creative freedom, it is usually a good idea to follow your interests and passions. Of course, you may have an idea but not know if it’s worth pursuing — 40% of those surveyed said they would start a business if they had more confidence in their ideas. To gain better insights into your idea’s potential, you could research the chosen market to identify whether there’s demand for the product or service you would be offering. Ask yourself questions such as, does it address a specific problem among the target market? How would you differ from competitors? Is the potential market size large enough to generate enough income? Starting small with a side hustle can give you further insight into whether your idea will get much interest. If you’re dedicated to gaining more information, you could also commission market research, send free products for reviews, or ask for feedback from a community.

Making the step from side hustle to fully self-employed

Once you’ve gone through the above considerations and you’ve decided to venture into self-employment, start planning your timeline. When will you have the necessary funds, and how long do you need to give notice to your employer? It’s usually wise to stay on good terms with your employer as a backup for the future. Also, try to line up enough work to fill your schedule for the first few months and, ideally, some regular work that will consistently bring in revenue. Work on expanding your network of clients and customers through means such as networking, offering discounts or incentives, email marketing, and boosting your online presence. Set up efficient processes so that you can conduct your work smoothly without any administrative issues delaying your output or income. Additionally, create a routine you’d like to follow and some self-management guidelines to help you stay motivated. If you’re in a stable financial position, with interest in your product or service and a strong business plan, it could be time to take the leap into full-time self-employment. However, remember that there may be several benefits to keeping your business as a side hustle for more stability and security.

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