There was a nationwide surge in entrepreneurship last year, and in nowhere was that trend potentially stronger than the ten parish Greater New Orleans Region. The Census Bureau reported a 24% increase in new business applications nationwide. The metro more than doubled that national increase according to GNO Inc.
“Going from 2019 to 2020 what we saw was a 57% spike in business formation,” GNO VP of Communications Matt Wolfe told WWL. “Going from right around 21,000 businesses started in 2019 to just over 33,000 that were created in 2020.”
Analysis by the Economic Innovation Group of Census data shows new business applications surged to over four million. Most of the new filings were not considered to be “likely employer applications”, but likely employer applications did see a 15% 2019 to 2020 increase.
Wolfe said there’s been a concerted effort to make Southeast Louisiana more small business-friendly.
“We’re now a market that has so many services available to small business owners to help them with that original growth that they need to really get up and going and become profitable,” said Wolfe.
Louisiana as a whole saw above average growth in new business applications, at a roughly 33% increase comparing 2019 to 2020. Secretary of State numbers indicate roughly 50,000 new applications were filed statewide in 2019, compared to about 75,000 in 2020.
So, who was actually starting all of these new businesses? UNO Economist Janet Speyrer said the work from home revolution spurred many employees to go into business for themselves.
“Workers have been working at home and have basically made that new environment for themselves and so they find that they don’t need the employer as much,” said Speyrer. “As they work on their own instead of as an employee, they are set up, they’re already set up.”
EIG analysis shows new business applications were actually slightly down from April to June in 2020, but the number of new applications began to explode right around late July of 2020.
Speyrer suspects many of these new entrepreneurs were the estimated three million Americans who have taken an early retirement since the start of the pandemic.
“People who were recently retired could also go into their own business once they achieved what they needed to do,” said Speyrer. “I’m going to try this new business that I have wanted to do for a long time, so I am going to take this retirement and use it to my advantage.”
Speyrer said this trend in entrepreneurship has been increasing steadily for the last decade, but the increasing number of people choosing their own path need to prepare to work a lot more hours than they used to, at least for the first few years of their new business. Speyrer warned that with the new work culture will come some social changes however, as many Americans get most of their socialization through the workplace.
