Open for business: U.S. companies are reopening or forming at a breakneck pace
“The main business of the American people is business,” President Calvin Coolidge said nearly a century ago. They still agree with him as the United States emerges from the coronavirus pandemic.
The reopening of the economy as the pandemic slowly passes has spawned an explosion of new and reopened businesses. More than 60,000 businesses reopened from April through June while nearly 151,000 new businesses were created, according to the online review site Yelp.
Reopens have grown at the fastest rate in a year, Yelp found, and the number of startups is the highest since at least 2004, other research shows.
These numbers may be just the tip of the iceberg. They only include businesses listed on Yelp and generally serving consumers. Other research indicates an even greater increase in new businesses.
The US federal government census, for example, estimated that nearly 450,000 new business start-ups were filed in June alone. Most won’t actually work, but the demands are almost twice as high now as they were at the start of the pandemic.
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The wave of new businesses actually started late last summer after the economy partially reopened. Many people who lost their jobs or had time off due to government restrictions ended up starting their own businesses.
In many cases, people have turned “side jobs” into full-time concerts. In the second quarter, for example, Yelp said about a third of new businesses started were involved in “home services” such as lawn care, house cleaning and painting.
Changes in consumer behavior have altered the model for starting new businesses in other ways as well. Take care of the automobile.
Most people avoided public transportation during the pandemic, and some left cities to escape the pandemic, triggering an increase in demand for new and used cars. This has led to the formation of many more auto repair shops and other auto related businesses.
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Thousands of new restaurants also opened in the spring as Americans again went out to eat. Many restaurants had failed last year when dining at the table was rejected or restricted by the government.
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The southern United States saw the biggest increase in new business in the second quarter, Yelp said. Yet consumers in the South search the review site online less frequently than in other parts of the country where a higher percentage of the population is vaccinated.
Right now, the South has the lowest vaccination rates and the highest number of Covid cases of any region.