This article was adapted from “The Ongoing Wave Of Entrepreneurship Is Set To Reshape The U.S. Economy” written by John Caplan for Forbes.

Entrepreneurship is at the heart of the American spirit, and yet the numbers tell a story of decline since the 1980s. According to the Congressional Budget Office, new businesses constituted 38% of all firms back in 1982, but have dropped to just 29% as recently as 2018. But things are looking up: the US has experienced a sudden resurgence of entrepreneurship during the past 18 months, reignited by the realities of the this past year’s hardships and subsequent economic crisis.

For a lot of reasons, millions of Americans became entrepreneurs in 2020. Mass layoffs created record unemployment leaving millions in need of jobs. At the same time, many people were now working remotely and that lifestyle change motivated them to seek more fulfilment, pursue career paths with greater flexibility, or finally explore a passion project they had been putting off.

An impressive 4.3 million new business applications were filed last year, and 3.8 million have been filed so far this year, according to US Census Bureau data. Furthermore, the rate of new entrepreneurs hit 38% in 2020, which is notably higher than 31% in 2019, according to the Kauffman Foundation’s National Report on Early Stage Entrepreneurship in the United States: 2020.

As this new wave of entrepreneurs emerges, it’s important to note that entrepreneurship is taking on a new face. Recently, Chovm.com partnered with Hello Alice for our first-ever small business grants program to provide a total of US $500,000 in funding and hands-on ecommerce support. As we reviewed over 10,000 applications, we noticed an overwhelming amount of women, minority, and veteran entrepreneurs — a shift that speaks of more good things to come.

Seeing millions of people from all walks of life taking on the challenge of starting their own business in the face of greater than usual uncertainty, whether out of necessity or passion or some combination of the two, is inspiring because it speaks to inherent capability and thoughtfulness.

This past year “has forced us to learn so much about ourselves and the world around us,” said Jeff Harbach, President and CEO of Kauffman Fellows, a premier innovation, leadership, and venture capital-focused program. Since 1995, Kauffman Fellows has accelerated the development and success of venture capitalists around the globe, supporting Fellows to navigate every aspect of innovation investing, from deal flow to public markets. Harbach is one of many leaders who has successfully helped maneuver multiple companies through the this past year. “It has made many ask themselves what they want out of life and what they can focus on to make a difference in their lives and the world.”

Entrepreneurship looks different for everyone

Everyone’s connection to entrepreneurship is unique and so are their stories about how the difficulties of this past year have impacted businesses and what advice leaders have for their fellow entrepreneurs today.

Take the story of JJ Tartarini, the Co-founder of U-LUV Foods, a Colorado-based healthy snack brand whose mission is to serve cookies with compassion. “My entrepreneurship journey started when I got laid off from my corporate job,” said Tartarini. “I always wanted to be an entrepreneur, but I never knew how to get started. When the gluten-free trend took off in 2012, my mom made a cinnamon roll version that we sold in farmers’ markets. By 2018, we decided to make it a more focused business venture and landed in some natural grocery stores with our gluten-free goods. This is where we learned three things: no one understood our brand name (BowBeas named after our family dog’s nickname), our shelf-life wasn’t great, and arguably most importantly, we were just gluten-free so we were only one facet of the emerging natural food market. So, we pulled ourselves out of stores and spent 2019 reformulating our cookies. Our products are now free from all eight major FDA allergens and gluten free, and U-LUV Foods was ready to launch in January 2020.”

For Tartarini, it’s about more than being his own boss. “I love the mission of our company — to create great tasting snacks and give 10% back to charities — and that’s what was missing at the beginning. If your goal is just to make money, you won’t find much purpose in what you’re doing because you won’t be passionate about it.”

Like so many others, Tartarini’s business was impacted by the hardships of this past year. “We were selling our products online, but had always intended to focus on grocery stores. The disruption from the past year has forced us to rethink that effort,” shared Tartarini. “We’ve been able to use our digital sales to show retailers consumer demand, and the grocery stores have responded really well. In a way, it has sped things up for us and we’ve fit in nicely with the ordering-in trend.”

Rashee Gupta is the founder and CEO of MGS Accessories, a vegan and cruelty-free makeup and skincare line with a focus on diversifying the beauty industry through high-pigmented palettes that compliment women of color. “Entrepreneurship is in my blood,” explained Gupta. “My father owned a restaurant and my mother ran a catering business. Growing up, I always knew that working and being independent was a necessity.” This past year, Gupta has been able to capitalize on the surge in interest in eye makeup and accessories since so many people are wearing masks and are looking for ways to beautify visible parts of their face.

Entrepreneurship’s impact on the US economy

While the personal benefits that entrepreneurs gain from pursuing their own ventures can be significant, it’s also critical to acknowledge the value that entrepreneurs are bringing more broadly to their communities and to the country overall. Without question, entrepreneurship drives economic growth. Individual enterprise creates job opportunities, and according to the Kauffman Foundation, most job creation comes from companies that are zero to five years old.

“At the beginning, I never thought we’d be able to hire people,” admits Gupta, “but we have been able to hire a handful of people. Starting a business not only helps people find jobs, but it also helps the economy grow and keeps people purchasing, creating a full circle effect.” – MGS Accessories

Harbach agrees, noting that entrepreneurship is a strong driver of a country’s GDP: “Countries that provide increased support for entrepreneurs through capital resources and talent are going to experience an increase in their GDP.” He admires entrepreneurs for their contribution to the economy, calling them “true heroes who are endeavoring to solve the world’s greatest problems. They’re the ones that are building companies that are impacting millions of people, and they are the ones creating economic independence for those that may not have had it in the past.”

Advice to new entrepreneurs in the new normal

Getting your own business off the ground is rewarding and demanding, and these experienced small business entrepreneurs had some words of wisdom for those starting out — namely, that you should go for it, and when you do, be clear and resolute on your goals.

“I often meet people who have an idea and leave it at that — an idea,” said Gupta. “They deprioritize it or forget about it completely. But I always say there’s no harm in pursuing your idea, product, or passion, because you never know where it might take you.”
“Be steadfast in what you’re trying to achieve,” advised Tartarini. “In today’s age, we have a need for instant gratification. It’s important to remember that you’re trying to start something you believe in and success won’t happen overnight. Keep going.”

And keep going we will. Just like so many of the unexpected changes of the past 18 months, this wave of entrepreneurship will continue to transform our economy. The new generation of entrepreneurs is invigorated — solving challenges the world has never faced before and offering products and services that make our lives better in ways we couldn’t have ever imagined.

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This week’s #B2BTuesday Tip:

Just as JJ Tartarini advised, don’t stop trying just because you don’t see success immediately. If you believe in the idea, success won’t happen overnight. Keep working toward your goal.

Sources:

Original Forbes article: http://www.forbes.com/sites/johncaplan/2021/11/05/the-ongoing-wave-of-entrepreneurship-is-set-to-reshape-the-us-economy/?sh=3250a9a856bf

Congressional Budget Office: http://www.cbo.gov/publication/56906

Kauffman Foundations’ National Report on Early Stage Entrepreneurship in the United States: 2020: http://ssti.org/blog/kauffman-report-finds-entrepreneurship-grew-2020-entrepreneurship-choice-declined

Kauffman Fellows: http://www.kauffmanfellows.org/

Kauffman Foundation Research Series: Firm Formation and Economic Growth Where Will The Jobs Come From?: http://www.kauffman.org/wp-content/uploads/2019/12/where_will_the_jobs_come_from.pdf

MGS Accessories: http://mgsaccessories.com/

U-LUV Foods: http://www.uluvfoods.com/

US Census Bureau: http://www.businessinsider.com/the-great-resignation-created-more-solo-entrepreneurs-and-freelancers-2021-10