The Pandemic’s Economic Impact Includes More Americans Starting Their Own Small Businesses

We’re now entering year three of the COVID-19 pandemic, and the U.S. economy is still struggling thanks to inflation, supply chain issues, and continually bad jobs numbers. However, small business creation has been an unexpected economic bright spot since the pandemic began, and pandemic-era entrepreneurship could be an important part of the economic recovery in 2022.

In 2021 (excluding data for December, which the U.S. Census Bureau has not yet released), an average of around 452,000 new business applications were filed monthly. That’s a significant increase compared to 2019, when an average of roughly 293,000 new business applications were filed each month. Those numbers dipped in March and April 2020 before catapulting to over 550,000 in July 2020 and remaining above 2019 levels through the end of the year.

The 2021 data look especially promising because new businesses tend to hire employees. From January 2021 through the end of Q3, 1.4 million applications were filed to form businesses likely to hire workers, more than any other comparable recorded period. These so-called high propensity applications have been strong throughout the pandemic, with over 400,000 more filings in 2021 compared to the same point in 2019, and 255,000 more than at the same time in 2020.

A December 2021 Intuit QuickBooks survey predicted that up to 17 million new small businesses may be formed in 2022. Of those 17 million, Intuit estimated that 5.6 million will hire employees. Over 80 percent of survey respondents who were already considering opening a business reported that COVID-19 had sped up their plans. – READ MORE