According to the US Census Bureau, almost all or 99 percent of businesses in the United States are small businesses. Among these, 80 percent are non-employer businesses or one-person companies. That the US is a country of entrepreneurs is proven that new business applications continue to increase despite the COVID-19 pandemic.
According to the Economic Innovation Group, data from the Business Formation Statistics show that there were 1.14 million new business applications in 2020 compared to 987,440 in 2019. As of September 2021, there were already 1.4 million new business applications. The number of filings in the first three quarters of this year is the highest for three quarters in history.
This is reassuring for people considering setting up a business in 2022. If you are one of them, it will be most helpful to get all the information and lessons learned by other small businesses during the pandemic.
Cover Your Bases
The risk in setting up any business is high, and more so during a pandemic. Choose a business with the lowest possible capital outlay so that you do not have too much financial exposure. However, part of your protection is to have the proper business insurance. Do not neglect this. Hire an insurance law firm to guide you on what types of business insurance you are required to have and what you need.
Explore all available grants that you can apply for from the government, nonprofit organizations, or private institutions. Search your local Small Business Administration (SBA) Small Business Development Centers for any funding that could apply to your startup. The Swiftarc Beauty Fund has $10 million to distribute among qualifying beauty and wellness startups led by women. The 500 Global Flagship Accelerator Program invests $150,000 in startups and small businesses in San Francisco.
The Power Forward Small Business Grant gives $25,000 to black-owned small businesses with 25 or fewer employees. The Amber Grant Foundation grants $25,000 every December and $10,000 every month to female entrepreneurs. The Grow by Invoice2go grant gives up to $15,000 to minority-owned small businesses. The SoGal Foundation’s Black Founder Startup Grant gives nonbinary, black, and multiracial women entrepreneurs up to $10,000.
The Hello Alice Small Business Growth Fund offers grants of $5,000. The National Association for the Self-Employed (NASE) Growth Grants gives members up to $4,000. The Go. Be. Elevate Fund gives up to $4,000 to small businesses owned by minorities or focusing on diversity.
Apart from grants, you can also seek low-interest loans. The Business Warrior Small Business Loans are from $5,000 to $50,000 and have low-interest rates
Lessons on the New Business Normal
Potential entrepreneurs have a lot to learn from the experiences of current business owners. Running a business in the new standard created by the pandemic has overturned many traditional business practices.
Bank of America’s 2021 Small Business Owner Report presents a survey from March 11 to May 5. More than 6 in 10 entrepreneurs implemented digital strategies to survive and thrive during the pandemic. Among these were interacting virtually with customers and employees, using mobile apps and online banking, accepting additional cashless payments, and strengthening their social media presence. Moving forward, they intend to continue these practices and implement a more digital sales strategy online.
While 85 percent stated that the pandemic has made running their business more stressful, more than half still expressed positive sentiments. Running a business was fulfilling, according to 55 percent, and 52 percent stated that they felt determined and resilient amid the pandemic. The coping mechanisms that entrepreneurs used were scheduling fun activities, prioritizing spending time with family and friends, shifting to healthy habits, avoiding news and social media, and turning to spirituality.
According to the Small Business Index of the US Chamber of Commerce, in the third quarter of 2021, 34 percent of small entrepreneurs saw the US economy in a state of good health. A majority, or 55 percent, stated that their business was also in good health, and 66 percent reported that they had a good cash flow. These percentages are nearing pre-pandemic levels.
Almost 58 percent of entrepreneurs expressed optimism that their revenue will increase in the coming year. However, there are still challenges that they expect to face, with 23 percent citing COVID-19 safety protocol compliance, 19 percent citing issues with the supply chain, and 19 percent citing inflation.
The following years look good for startups if they pay attention to this year’s learnings. It is also essential to be observant of changes in the market that may need new strategies. As in 2021, flexibility, innovation, and quick reaction times are markers of success.