How the Small Business Sector Has Grown Throughout the Pandemic
Neil Bradley of the U.S. Chamber of Commerce shares his outlook on small business growth trends a year and a half into the COVID-19 pandemic.
Air Date: October 21, 2021
Moderator: Jeanette Mulvey, Editor-in-Chief at CO—, U.S. Chamber of Commerce
Featured Guests: Neil Bradley, Executive Vice President, Chief Policy Officer and Head of Strategic Advocacy, U.S. Chamber of Commerce
The COVID-19 pandemic brought about countless challenges to the small business world, impacting companies across every sector in unique ways. However, as the economy slowly recovers, businesses are reflecting on these changes and how to forge a path forward.
At CO—’s 2021 Big Week for Small Business, Neil Bradley, executive vice president, chief policy officer, and head of strategic advocacy at the U.S. Chamber of Commerce, offered insights on small business growth trends a year and a half into the pandemic.
New Business Starts Are Up Double-Digit Percentages
Despite the coronavirus pandemic leaving many working professionals without a job or steady income, more startups have launched over the last year than they have since 2005.
“Last year, 4.3 million new businesses started all across the United States,” said Bradley. “In some states, we saw new business starts at … 20% over the year before. Nationally, [there was] a 24.6% increase in the number of new businesses started, and we broke what was an awful trend line that we were on.”
This has been especially exceptional growth when compared to recent years.
“[The U.S.] had a few years where business deaths were actually larger than new business bursts,” Bradley continued. “And we blew that away in the last year. We're looking at trend lines that are going to continue with new business starts from people in their prime working years, minorities, veterans — all outpacing prior records in terms of new business creation.”
New Business Owners Seized Opportunities in the Pandemic
While many skeptics chalk this recent success up to “new business creation by necessity,” Bradley explained, it seems “the critics are overselling” this fact. In 2020, only about 30% of entrepreneurs were unemployed at the time that they started their business, which was higher than usual but not by much.
“You still have people who are entrepreneurs by choice who actually saw opportunity in the pandemic and seized it,” Bradley said. “And I think even when we're talking about those individuals who went from a prior employment to unemployment to owning their own business, this was probably a great unlocking event.”
The Government Has Concluded Most COVID-Related Small Business Aid
Bradley stated the government assistance that has been offered throughout the pandemic will soon no longer be available. In particular, the Paycheck Protection Program (PPP), restaurant revitalization grants, and shuttered venue grants have already concluded.
However, Economic Injury Disaster Loans (EIDLs) still exist, as well as the employee retention tax credit, for which business owners should explore their eligibility.
“CO— has a guide for small businesses where you can help figure out if you're eligible,” said Bradley. “You have to have a revenue that's down by 20% or more in a quarter … [and] you can get a sizable tax credit to help offset your wage cost for your employees.”
There Has Been an Explosion in the Non-Classified, Retail, and Transportation and Warehousing Sectors
Bradley stated that small business growth has been seen across the board and across every industrial sector. One of the biggest instances of growth, he noted, was in the “not-classified sector,” or businesses that may not fit into a traditional definition.
“They may be the real entrepreneurs and the innovators who are creating something new,” Bradley said.
Additionally, both the retail and transportation and warehousing sectors experienced exponential growth, likely because of how easy it is to reach customers online.
“[It used to matter] how big the market was in your hometown — how many people would pass by on Main Street,” Bradley added. “Today, the world is your Main Street. With the right technology and the right strategy, you can reach consumers around the world.”