According to a new report from the U.S. Census Bureau, new businesses are forming at the fastest rate in a decade. Business applications soared by over 1.5 million in the third quarter, a 77% increase over the second quarter of 2020.
Despite the devastating impact of the coronavirus on businesses, many entrepreneurs are focusing on opportunities arising from newfound consumer demands while the U.S. economy undergoes a reformation and the pandemic continues.
Opportunities during a recession
Starting a business during a recession may seem like an impractical idea to many, especially in the middle of a downturn caused by a global health crisis. However, others look at these incentives:
- The cost of borrowing money dropped sharply after the Fed lowered interest rates to near-zero
- New businesses can stand out as others are shutting down across the country
- A large pool of smart, talented workers is available after massive layoffs
New business filings top 2019 level
As of late September, 3.2 million business applications had been filed. That amounts to half a million more than at the same time one year ago. In 2019, nearly 31 million small businesses existed in the U.S., representing a whopping 99.9% of all companies.
Still, just because there’s an uptick in new filings, not all will translate into actual business ventures. What it means is many people are actively considering a startup and decided to begin the paperwork with the IRS.
Setting a course for success
Statistics show that half of all new employee business ventures fail within the first five years, and the chances for failure increase significantly during tough economic times. That’s why it is crucial not to make any unforced errors.
Working with an experienced business planning and formation attorney is vital for building a solid foundation for your company, whether it’s instilling financial accountability, succession and dissolution planning, avoiding potential disputes, or preparing for the many other challenges that face businesses every day.
If you’re ready to explore the possibilities, call managing partner Mark Tebelius at 651-738-3433.