Many people might think that a global pandemic is exactly the wrong time to start a new business, with hundreds of thousands of small businesses struggling to stay afloat, millions unemployed, and the future looking uncertain.
However, millions of Americans would beg to differ. According to data from the U.S. Census Bureau, Americans have been filing new business applications at the fastest rate since 2007. (This is based on the number of Americans filing for a new Employer Identification Number, a crucial first step in the life cycle of a business.)
On average, Americans filed about 84,000 applications for new businesses per week in 2020 (through the end of September). For comparison, the number hovered around 67,000 in 2018 and 2019. During 2008 and 2009, amid the Great Recession, this number was just under 50,000.
And entrepreneurial activity soared in the period spanning from June to early September with more than 110,000 new business applications filed per week, on average.
To be sure, not all of these businesses will last. And just because someone files for an Employer Identification Number doesn’t mean they will actually see their business through to formation. However, the numbers indicate that millions are more than willing to give entrepreneurship a shot, even in uncertain times.
Throughout history, many businesses have arisen out of tough times. For example HP got its start in the years after the Great Depression. Hyatt and Trader Joe’s started during a recession in the late 1950s. And then, more recently, Uber, Airbnb, Square, Groupon, and Venmo (among other companies) were born out of the Great Recession.
The rise of the COVID-preneurs
It’s too early to tell what the next Uber or Airbnb of the COVID-19 pandemic might be. The team at LegalZoom looked into what’s causing this surge in entrepreneurship amid the pandemic. For some, the pandemic made starting a business a necessity. For others, it opened up the door to pursue a long-held passion. Check out the infographic below to learn about the rise of the COVID-preneurs.
This infographic was created by LegalZoom.