How the Coronavirus Is Leading to More Small Business Creation
2020 was a tough year, but there’s optimism on the horizon. As the world deals with the pandemic, we’re seeing more entrepreneurs than ever choosing to start a new business. This seems counterintuitive, as the impact from COVID has created enormous disruption and difficult economic conditions. There are significant challenges ahead. But, even among the doom and gloom, business founders are looking to the future. They’re deciding that even with the current state of the world, the time to start that new business is now.
We’ve explored the research, interviewed entrepreneurs and tapped our years of experience and insight to understand the resilience of small business owners, how they’re adapting and what they expect as we navigate the crisis.
Pre-COVID: Small Business Success Before the Pandemic
To start, it’s helpful to understand just how important small businesses are to the U.S. economy. Pre-pandemic:
Approximate number of small businesses in the U.S.
People that were employed by small businesses: 47% of the working population.
Number of new jobs added by small businesses.
Sources:SBA Office of Advocacy, 2020 United States Small Business Profile
The small business sector was strong and resilient heading into the pandemic, making it able to weather many of the challenges presented.
The Impact of COVID on Entrepreneurship
There’s no denying that COVID-19 has had a significant impact on businesses. Unemployment rates are up significantly, there’s been a huge shift to working from home and businesses have had to adapt fast — more than eight in ten businesses have felt an impact from the pandemic.
Fortunately, entrepreneurs are resilient. More than two-thirds of businesses have pivoted to new revenue streams, and we’re noticing more founders starting up new businesses than before.