Growthink Research Shows 49% Increase in New Business Starts; Today's Layoffs will Lead to an Economic Boom by 2025
LOS ANGELES, Oct. 20, 2020 /PRNewswire/ -- Growthink released a groundbreaking report today proving the coronavirus pandemic has yielded the largest boon to American entrepreneurship ever.
According to raw data Growthink analyzed from the U.S. Census concerning new business applications, in Q3 of 2020 more businesses were started in the United States than in any quarter in history.
Growthink found that 1.4 million new businesses started during the third quarter. This represents a 49% increase from the second quarter. Furthermore, since new business starts in Q3 are traditionally less than in Q1 and Q2, the Q3 increase was even more impressive. The previous record for new business starts in Q3 occurred in 2018 when 829,170 were formed. That record was shattered by 67% last quarter.
According to Lavinsky, the growth trend can be attributed to "laid off workers realizing they need to be responsible for their own financial destinies. For some, getting fired may turn out to be the best thing that financially ever happened to them."
Further to this, Lavinsky notes many employees are opting out of the traditional workforce to start their own companies. "Most new work-from-home employees have now gained one to three hours per day as their commutes have been eliminated. Some have been using this time to develop their business plans and launch their own companies. Many figure, 'if I'm going to ditch the office, why not ditch the boss too?'"
Based on historical figures, 50% of these new businesses should survive five or more years and in aggregate, they should provide 4.8 million jobs. "The coronavirus pandemic has provided a long-term, multi-billion dollar economic stimulus package that didn't cost Congress a dime," said Lavinsky.
Since 1999, Growthink has helped over 1 million entrepreneurs and businesses launch with a focus on helping privately held companies raise capital for growth and shareholder liquidity.
Growthink accomplishes this goal through its suite of services including expertly identifying and pursuing new opportunities; building marketing and growth strategies, and developing and executing upon innovation, exit and business plans.