Though many would title 2020 “The Year That Ruined Everything,” that isn’t quite accurate.
Yes, many plans were cancelled and many jobs were furloughed or lost, but believe it or not, this unprecedented year brought with it a noticeable increase in new business applications.
Even amid the pandemic, Americans have been filing applications for new businesses at the fastest rate since 2007, according to the U.S. Census Bureau.
Millions of these “COVID-preneurs” are giving new businesses a shot, despite all of the economic damage the pandemic has caused.
Risky? Sure. But risk-taking is nothing new to entrepreneurs.
“Small businesses make up the overwhelming majority of businesses in the U.S. and employ tens of millions of Americans,” according to Legal Zoom. “Hundreds of thousands of small businesses have struggled greatly during the pandemic. At the same time, public confidence in small businesses has soared to record highs, and hopeful business owners are applying for new business applications at the fastest rate in more than a decade.”
It seems, given the economic shakedown the world has undergone, that many are longing for a more “grassroots” approach to life, favoring small businesses and mom-and-pop operations to large corporations.
According to Gallup Data, the confidence Americans have in small businesses has increased dramatically over the last year, exceeding even the military and the medical system.
What’s more, an average of 111,000 new business applications were submitted between the end of June 2020 and the beginning of September per week.
Could the newfound confidence in small businesses create the right climate for emerging COVID-preneurs?
Well, it depends on the type of business. Local economic data from Yelp shows that restaurants and retailers experienced the highest rate of closures from the pandemic, while accountants, architects, real estate agents, and plumbers (among others) had an easier time staying in business.
Why Start a Business in the Middle of a Pandemic?
Fair question. Believe it or not, there are several valid reasons to start a new business in the middle of a pandemic.
With the unemployment rate surpassing that of the Great Recession, the need for people to create their own income is more present than ever. And when it’s especially difficult to find work because of stay-at-home orders, starting a work-at-home online venture might be the ticket.
People have been home more than usual in the last year. Free time at home has provided plenty of opportunity for people to think of viable business ideas, or simply act on ideas they’ve had for a while.
New community needs
When many small businesses closed, new ones stepped in to fill the need. New businesses services (such as home delivery services) were also in higher demand.
Many new businesses (about a third) start with less than $5,000. This is doable with so many businesses shifting to remote and online operations, often incurring fewer expenses overall.
Starting a business, especially one with low start-up costs, can be an excellent way to supplement income without having to take a second day (or night) job.
Lending a helping hand by starting a small business is a great way to come together in times when we are driven apart by difficult circumstances. In fact, over half of entrepreneurs start new businesses to make a positive difference in the world.
Entrepreneurship is not for the faint of heart. But, as many entrepreneurs will tell you, the struggle is worth the freedom to pour into professional pursuits and create the kind of lifestyle that suits you.
If 2020 saw such an increase in new business applications, might 2021 be an even more successful year for small business growth?
For more information on the rise of COVID-preneurs, check out the infographic below.