If you’ve ever dreamed of being your own boss but aren’t sure where to start, you’re not alone. For many, the idea of launching a business can feel overwhelming—finding funding, renting a storefront, hiring employees—it’s a lot. But a recent study reveals that there may be a simpler, lower-risk way to dip your toes into entrepreneurship: start as a gig worker. By starting as a gig worker, you can gain valuable experience and insights into your chosen industry without the heavy commitment that comes with traditional business ownership. This flexible approach allows you to test your ideas, understand customer needs, and even learn how to choose expansion locations if you decide to expand in the future. With this groundwork laid, you’ll be better equipped to make informed decisions as you chart your entrepreneurial path. Moreover, gig work can also serve as a testing ground for innovative ideas, including transforming trade show experiences. By engaging directly with clients and gathering real-time feedback, you can identify what resonates with your audience and what doesn’t. This hands-on experience not only enhances your skill set but also builds a network of potential clients and collaborators within your industry.

According to a new study of U.S. tax records from 2012 to 2021, 2.5% of gig workers transitioned into starting a new business, compared with just 0.7% of the working-age population. Younger gig workers, in particular, were more likely to make the leap, with an average age of 38 compared to 41 for non-gig founders. This trend highlights the entrepreneurial spirit prevalent among gig workers, suggesting that they are often seeking greater independence and flexibility in their careers. Notably, the data indicates that while younger individuals are typically more inclined to take risks, it is essential to recognize that one can start a business at any age. As more people embrace alternative work arrangements, the pathways to entrepreneurship may continue to diversify and expand.

Related – Gig Economy Advantage: Leveraging Freelancers While Staying Compliant

Why Gig Work Can Be a Gateway to Business Ownership

Gig work—whether it’s freelance consulting, driving for a rideshare service, or offering graphic design services—offers a unique combination of flexibility and financial potential. Because gig work is generally easier to enter than full-time employment, it allows aspiring entrepreneurs to build experience, develop skills, and generate income that can be reinvested into a business.

It’s a model that works for a wide range of people, from younger individuals looking to build a career to those who may be underrepresented in traditional entrepreneurship. The flexibility of gig work means you can gain experience, save capital, and develop client relationships—all on your own schedule.

The Numbers Tell the Story

The study showed that gig entrepreneurs experienced significantly higher gross profits compared to their peers who didn’t start as gig workers. Specifically, the gross profits of businesses founded by gig workers were 39.4% higher one year after founding, 46.9% higher after two years, and 42.1% higher after three years.

But there are trade-offs. Companies started by gig workers were less likely to survive long-term, with a one-year survival rate of 69.4%, slightly lower than the 72% survival rate for businesses started by the general working population.

Getting Started: How to Transition from Gig Worker to Business Owner

If you’re thinking of using gig work as a stepping stone to business ownership, here are a few tips to help you succeed:

1. Start with What You Know: Choose gig work that leverages your existing skills or interests. This makes it easier to provide value and build a client base.
2. Save Capital: Use your gig earnings to save for startup costs. Whether it’s buying equipment, investing in marketing, or registering your business, having funds set aside will help.
3. Build Relationships: Every gig client is a potential customer or referral source. Make a habit of delivering excellent service and staying in touch.
4. Learn Continuously: Use your gig work to gain experience, improve your skills, and learn about your industry.
5. Have a Clear Transition Plan: At some point, you may want to transition from gig work to running your business full-time. Plan for this shift by gradually scaling your business and managing your finances carefully.

The Bottom Line

Starting a business doesn’t always mean going all in from day one. For many successful entrepreneurs, the journey begins as a side hustle or gig work, allowing them to build experience, save money, and test their business idea in a low-risk environment. If you’ve ever considered launching your own venture, starting as a gig worker might just be the perfect first step.

Related – When Is It Time to Leave Your Day Job for Entrepreneurship?