Don't Panic — You Could Just Go Into Business
WHY YOU SHOULD CARE
Because entrepreneurs are taking the "P" out of pandemic to pivot.
By Joshua Eferighe
It doesn’t seem to add up. Combine the pandemic with more than a quarter of a million dead, high unemployment, a health care system in crisis and a recession, and you’d presumably have a formula for entrepreneurial doom. But Whitney Williams didn’t get the memo.
While entrepreneurship, especially among Black women like Williams, is proof that the American dream still exists, this is a decidedly shaky time economically. U.S. jobless rates reached an all-time high in April, and department stores, entertainment giants, travel agencies and other sectors of the economy have seen the writing on the wall. Globally, economic growth in 2020 is expected to fall by 4.9 percent, according to the World Economic Outlook, marking the worst economic downturn since the Great Depression.
Williams, a 28-year-old Atlanta native, fell victim to this downturn when she was furloughed in February. But she didn’t let that keep her down: Williams decided it was a good a time as any to launch a new business. She’s now the CEO and founder of Whit Marie, an activewear brand that doubles as a wellness and lifestyle blog.
“When I was ready, I said to myself: ‘You’ve just got to do this. … No one is going to wait for you,’” she recalls, noting that she applied for her employer identification number (EIN) in June.
Turns out, she was far from alone.
U.S. business startups are being launched at the highest rate in 13 years.
That’s according to the Census Bureau, which reports that there have been 3.2 million requests for EINs this year, dwarfing the 2.7 million in 2019.
A new study from BryteBridge, a consulting group that helps small businesses and nonprofit startups, backs up this data. According to BryteBridge’s CEO Brian Davis, the firm has seen a 22 percent spike in new business and has helped launch more than 1,800 businesses this year.
Much like today, there was a rise in business applications following the housing market bust in 2008. But today’s startup rate (37.5 percent) tops that of 2008 (31.6 percent), so what about 2020 is driving entrepreneurs to come out of their shells?
Partly, it’s because the recession is driven by different factors this time around. Unlike a housing market, people understand and accept the ebbs and flows of the stock market, which has seen remarkable results: While some big companies have been hard hit — J.C. Penney, Pier 1, Century 21, J. Crew and many others have filed for bankruptcy this year — the Dow Jones keeps going from strength to strength as companies like Pfizer, Amazon and Clorox see stocks soar.
But part of the drive to work for oneself, of course, is linked to the shakiness of the job market. Being laid off or furloughed can be a great incentive for taking control of one’s destiny. Add to that a lack of government stimulus funding, and you have families vowing never to be that vulnerable again.
According to Allen Adamson, an NYU adjunct professor in the School of Business and cofounder of marketing consultancy firm Metaforce, the pandemic is a “phenomenal disruption” that has snapped our collective world in half, forcing us to see things in an entirely new way. “If we were trying to start a business in normal times, people wouldn’t pay attention to it,” Adamson says. But there is “phenomenal entrepreneurial opportunity in this world,” he adds, because it needs to be “reimagined.”
Entrepreneurs should be careful nonetheless. BryteBridge’s Brian Davis cautions would-be founders about making the leap into business before looking at the big picture. For example, 70 percent of nonprofits experienced decreased revenue due to COVID. “’Giving Tuesday’ paints more of a positive picture than what’s happening with nonprofits,” he says.
Williams, meanwhile, is looking forward to her company’s official launch party today. She clearly enjoys being her own boss.