Record numbers of businesses closed during the pandemic is offset by a rapidly changing business landscape in 2020 with a record number of new business starts.
Coronavirus is having a profound impact on America’s small business community. The second quarter of 2020 saw a significant decline in the number of businesses owned by baby boomers; people in their 50s – 70s. Nearly 2.34 million of these businesses either permanently closed or changed hands. This represents at 25% decline in the number of baby boomers who are business owners or self-employed.
However, this loss of businesses was offset by 930,000 new business starts in the same quarter. New business starts hit a record high in the third quarter of the year. The U.S. Census Bureau’s statistics on Business Formation indicates that nearly 1.6 million businesses were started. This number is nearly double the next highest number of business starts in any one quarter over the past 15 years. Approximately 500,000 of new business owners indicated that they have hired or will be hiring employees.
That leaves more than 1 million new business owners who do not anticipate hiring employees within the next 12 months. Some of these people are unemployed workers who have created jobs for themselves. Others may be taking advantage of increased free time while working from home to start a side business and see where it takes them.
While the pandemic has presented many challenges, it has also created many new opportunities. If you are considering business ownership as an option, you should:
- Assess whether you have the self-determination and motivation to work for yourself
- Research the opportunity you are considering to ensure that there is a demand for the product or service you plan to offer
- Evaluate your skills and your finances to ensure you have the resources to be successful
- Seek guidance from professional business consultants
The University of Mary Washington Small Business Development Center is here to help. We provide training webinars and free, confidential business consulting. Request a consult or register for a webinar at our website www.umw.edu/sbdc.