November 24, 2021
C-Suite Wednesday – More Small Businesses Opening than Closing Says the SBA Office of Advocacy
“Two crucial small business indicators, self-employment and proprietors’ income, had historic declines in 2020. Both experienced very fast recoveries by early 2021. These indicators match the National Bureau of Economic Research’s conclusion that the two-month contraction in 2020 was the shortest recession on record,” reads the SBA Office of Advocacy’s November Economic Bulletin.
Here are the facts according to the SBA Office of Advocacy:
• There were historic spikes in establishment openings and closures from the second quarter of 2020 to the end of the year. By the end of the year, establishment openings were greater than the number of closures and have stayed that way through 2021.
• In early 2020 when the pandemic first started, proprietors’ annual income dipped, but it quickly increased after this dip. Proprietors’ income has been on the rise since and is well above pre-pandemic levels.
• Throughout 2021, self-employment levels have recovered from the slight decrease in 2020. While it took years for self-employment to recover from the Great Recession, it has taken a year to recover from this recession.
• Small businesses lost almost 6 million net jobs during 2020, showing a drastic decline in job creation. Larger firms (more than 500 employees) lost more than 4 million jobs in this same period. During the recovery period, there was a surge in job creation, and job creation has started to revert to pre-pandemic levels.