The Small Business Boom
The COVID-19 Pandemic has sparked significant change in how Americans view work and their professional lives. The Great Resignation is an example of this, as tens of millions of Americans have changed careers or quit working entirely, posing additional pandemic-related challenges to businesses and HR professionals. Additionally, the COVID-19 Pandemic has also ignited a “Small Business Boom,” or the surge in the number of small businesses and start-ups formed in the United States. From January 2021 through November 2021, there were around 5 million new business applications. According to the Census Bureau’s Business Formation Statistics, this is a 55% increase in the number of applications filed during the same period in 2019.
The Current State of the United States Business Boom
The Small Business Boom is still going strong. The Census Bureau’s Business Formation Statistics report approximately 419,500 new business applications in February of this year, a 2% decrease from the 430,000 applications submitted the month prior. Moreover, out of the 419,500 new business applications submitted this February, 135,000 are considered high-propensity applications, meaning they are more likely to create jobs.
Factors that Led to the Small Business Boom
COVID-19 created the perfect environment for small business formation, changing how people think about work-life balance, providing some individuals with additional time and resources, and presenting new, virtual opportunities. The U.S. Small Business Boom came directly after closing the “lost decade,” or the 2010s, one of the least entrepreneurial decades in U.S. history.
Several contributing factors have led to the Small Business Boom in the United States, most directly related to the Pandemic.
Change in Thinking and Viewpoint Regarding Work Life
There has been a recent change in how Americans view their working and professional lives. For example, many individuals quit their jobs during the Pandemic after realizing they did not have a sufficient work-life balance, especially those who saw their responsibilities multiply due to the Great Resignation.
Instead of remaining in their current positions, many individuals opted to start businesses. The people who chose this route have a shared experience of consistently working overtime. After realizing this, they decided to start their own business instead of working overtime for another company.
The Pandemic Provided Time and Resources
The Pandemic opened up a “window of opportunity” for those looking to start their businesses. It has cultivated an environment in which new small businesses can thrive. According to AXIOS, Google searches for “how to start a small business” jumped 124% in the first six months of the pandemic. As a result, many people used the time and resources to reevaluate their work and professional lives and encouraged them to begin their entrepreneurial journeys.
Those looking toward entrepreneurship used quarantine to plan for the future and learn the business fundamentals and the other skills required to start a business. Additionally, it granted some individuals the financial opportunity to start a business, as they used the stimulus checks to fund their small businesses and start-ups.
The current labor market is another essential factor regarding the pandemic’s role in creating the perfect environment for small business formation. Quitting a job to start a new business is risky, as many companies fail. However, because there are so many jobs available, many individuals decide to take that leap of faith and quit their jobs to start a business, as it is less risky to do so now than under less favorable labor market conditions.
Remote Work and the Digital Age Has Presented Many New Opportunities
In conjunction with new technologies and the digital age, remote work has opened up the door for many new opportunities. According to an AXIOS article, “The rise of the stay-at-home economy created new business opportunities in food delivery, human resources consulting, and ecommerce.” For example, during the pandemic, many individuals were looking for ways to cook, clean, eat and entertain from the comfort and safety of their homes, creating a demand for online retail shops and delivery service providers. Additionally, industries such as virtual tutoring and e-learning, digital marketing, and telehealth blossomed due to the pandemic.
The Small Business Boom in the Online Optimism Communities
The Small Business Boom in New Orleans, Atlanta, and Washington, DC have increased new business applications throughout the pandemic. Below are Business Formation Statistics presented by the United States Census Bureau regarding the rise in new business applications from January 2019 to January 2020.
The Increase in Business Applications from January 2019 to January 2020 in New Orleans & Its Surrounding Counties
Orleans Parish and some of the other parishes surrounding the New Orleans area have exhibited a drastic increase in the number of business applications received from January 1, 2019, to January 1, 2020:
- Orleans Parish had a 58.5 % increase
- Jefferson Parish had a 55.5 % increase
- St. Bernard Parish had a 71.8% increase
- St. Charles Parish has a 58% increase
- St. John the Baptist Parish had a 108.5% increase
The Increase in Business Applications from January 2019 to January 2020 in Atlanta & Its Surrounding Counties
Counties surrounding the city of Atlanta, including Fulton, Dekalb and Cobb, have shown a significant increase in the number of business applications received from January 1, 2019, to January 1, 2020:
- Fulton County had a 54.9 % increase
- Dekalb County had a 70.1 % increase
- Cobb County had a 47.1 % increase
- Gwinnett County had a 43.1 % increase
The Increase in Business Applications from January 2019 to January 2020 in Washington, DC & Its Neighboring Counties in Virginia and Maryland
Washington, DC saw a significant increase in business applications from January 1, 2019, to January 1, 2020. Additionally, counties in both Maryland and Virginia that are within close proximity to Washington, DC saw an increase in business applications during the same time period:
- Washington, DC saw a 19.2% increase
- Arlington County, Virginia saw a 7.8% increase
- Montgomery County, Maryland saw a 9.7 % increase
Do You Need Digital Marketing Assistance?
Did you start your own business during COVID-19, or are you considering starting your own business but aren’t sure where to start? Marketing your business can seem daunting and overwhelming, especially in today’s digital age. As a digital marketing company specializing in a wide range of digital marketing services, Online Optimism can help.