Even With The Economy Down, The Pandemic Sparked A Small Business Boom In America
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In the midst of the COVID crisis, millions of Americans started new businesses - not what you might expect during an economic downturn, but apparently not that unusual. Stacey Vanek Smith and Brittany Cronin with The Indicator From Planet Money tell us what's driving that hunger for entrepreneurship.
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STACEY VANEK SMITH: Since the pandemic began last March, Americans have started 6,714,318 new businesses. That is an all-time record. And one of those businesses was started by Chris Van Jura.
CHRIS VAN JURA: We are a mobile hot dog cart based in Montgomery County, Md.
BRITTANY CRONIN: Hot dogs.
VAN JURA: (Laughter) You can take the kid out of Jersey.
CRONIN: New Jersey, what's up?
VANEK SMITH: (Laughter) So, Brittany, you and Chris started talking hot dogs, and you had what I can only really describe as, like, a northern New Jersey hot dog mind meld. Like, I could not understand parts of what you were saying. But I did pick up that Chris' hot dogs are all beef. They are grilled, and they are served in, like, the special northern New Jersey way.
CRONIN: Yeah, yeah. Say it like a local. We call it all the way.
VAN JURA: An all-the-way dog - brown mustard, Texas chili sauce, raw onions.
CRONIN: So Chris took his savings and his stimulus check, and he started Catalyst Hot Dogs late last year.
JULIA POLLAK: Business applications are at an all-time high.
CRONIN: Julia Pollak is an economist with ZipRecruiter. She says COVID created a very unique set of circumstances that made ideal conditions for people like Chris to start a business.
POLLAK: There are two things that made a big difference. One - so many people were laid off on furlough and suddenly had time, but they didn't have time that they needed to use to spend desperately searching for work because they also got an enormous amount of fiscal support. So there are many people who took that stimulus check and decided, wow, I'm going to use this to start a business.
VANEK SMITH: Also, Julia says, starting a business now is really fast and really cheap. You can register your business for just a few hundred dollars. And a lot of these companies are really little. It's like a little store on Amazon or on Etsy where someone sells tie-dyed masks or candles.
POLLAK: Starting off as a lean, you know, freelancer-driven or remote-worker-driven, online-only business.
CRONIN: And that's how it worked for Chris. He bought the cart for about $10,000, puts in his food orders every week. His costs are minimal. He pays for the use of a commissary kitchen for food prep. He pays for propane to drive his cart around, and that's it.
VANEK SMITH: And this kind of business - or something like selling masks on Etsy - that might seem like small economic potatoes. But Julia says don't underestimate these businesses. Little scrappy companies like these have a superpower.
POLLAK: They're like cactuses. They're like plants that grow in difficult conditions but that can last forever.
VANEK SMITH: Julia points out that there is a rich history of companies started in economic downturns that went on to become some of the richest, most innovative companies on the planet. Microsoft, Uber, Disney, Revlon, Warby Parker, GE - those were all started during economic downturns.
CRONIN: Julia says these companies have resilience and survival in their DNA. Like Chris Van Jura - his own money is totally tied up in Catalyst Hot Dogs. The hot dog season is in full swing, and business is starting to pick up.
VANEK SMITH: Stacey Vanek Smith.
CRONIN: Brittany Cronin, NPR News.
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