The great startup boom
The pandemic has created a new generation of entrepreneurs — some by necessity, a lot by choice.
The U.S. Census Bureau reports that Americans filed 4.3 million business applications last year, a record number since the agency started tracking the data in 2004. And the number should be even higher this year.
Data from the Census Bureau show that the outsized surge started in summer 2020. Business applications in July 2020 were nearly double what they were in July 2019.
Think about what was going on in the summer of 2020. The economy had essentially shut down across much of the world. Businesses laid off workers or struggled to find a way to sell their products or services online. Many people started companies out of necessity: the musician who could no longer play live gigs, the yoga instructor who couldn’t teach in the studio, and the retail employee who needed to find a new living.
But people also started businesses because the pandemic changed their outlook on their careers. In a recent Salesforce survey, 57% of respondents said their main inspiration for starting a business was they always wanted to be their own boss.
The Census Bureau tracks business applications according to industry codes. Although the industry definitions are broad, there are some definitive trends in the types of businesses people are starting. We’ll explore some of the fastest-growing. And because we love domains, we’ll throw in a few suggestions for top-level domains if you’re starting a business in one of these industries.
Accommodation and food service
It may be surprising to learn that so many food and hospitality businesses started up during the pandemic. After all, travel went to a standstill, the government bailed out airlines, and many restaurants had to shut down or move to delivery/takeout only.
But this also meant a lot of people in these industries were looking for work. They started businesses with what they knew: entertaining people and cooking great food.
For some, this meant renting out an Airbnb property as a business. Others started catering businesses or food delivery services. And RV rental became a hot commodity.
Business starts in this category during 2021 are nearly twice what they were in 2019, although this has started to decline as the year progresses.
You can expect a resurgent boom as people make up for lost time traveling the globe.
Construction and real estate
Real estate values are soaring worldwide, and it seems that people can’t build houses fast enough. But they’re trying.
Seasonably-adjusted applications to start construction businesses hit an all-time high in May this year. More people are starting real estate businesses, too. Real estate business formations this year are more than a third higher than in 2019.
Retail is a big category. And while brick-and-mortar businesses adapt to the new reality, e-commerce is on a tear.
This segment has benefited from consumers flush with cash. As American consumers deposited stimulus checks, they also cut back on entertainment and travel spending. That money went into buying stuff. If you’ve tried to order at-home goods like a hot tub this year, you’ve faced a long wait. Some of this is due to supply chain challenges, but it’s also because people are spending their money on things they can enjoy at home.
Census data shows July 2020 as the highest month ever for business applications for retail trade. Many of these were for people starting online businesses selling everything from candles to clothing to electronics.
Arts & entertainment
This is another category that has boomed in part due to necessity and in part due to changing demand.
On the necessity side, live performers had to find a way to entertain in a new way. They started podcasts and online shows.
On the demand side, cooped-up consumers went online in search of ways to entertain themselves.
This boom will last
The record rate of new business formations might slow down, but it seems like entrepreneurship is becoming a new normal. The pandemic has been hard on everyone, but it has also given us time to reflect. What do we value? What do we want to do with our lives? For many people, the answer is to be their own boss.