Entrepreneurship Drives More Record Business Startups in NC | Local
Becoming your own boss continues to have an all-time high of appeal among North Carolinas as an economic ripple effect of the COVID-19 pandemic.
There were 46,868 new businesses launched in the first quarter, which beat the previous record of 44,930 in the first quarter of 2021 by 4.2%.
This included 1,235 in Forsyth County alone.
March produced the third-highest monthly total for business start-ups at 17,263, trailing only May 2021 and June 2021.
In contrast, 26,134 businesses were created in the first quarter of 2020, which included the first two weeks of the pandemic, and 25,605 in the first quarter of 2019.
For 2021, there was a record of over 185,000 business formation filings, up from the previous annual high of 127,000 in 2020.
Elaine Marshall, North Carolina Secretary of State, said the record number of businesses created is just another sign of “North Carolina’s determined entrepreneurial spirit continues to assert itself.” .
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Much of the impact of the pandemic on local and state economies has focused on the overall decline in available workers, especially those in minimum or low wage jobs.
“These business owners tell us in surveys that they see new opportunities to put money in their pockets and jobs in their communities,” Marshall said.
“These are not people who have lost their jobs and have nowhere to go.”
Marshall said the pace of new business start-ups “is a big boost to our national and local economies.”
“We are doing everything in our power in the Secretary of State’s office to get these new business owners up and running as quickly as possible.
“We are actively looking for ways to help these North Carolina business owners access the many resources available to help their new businesses succeed.”
Can it last?
The proliferation of new businesses in North Carolina is understandable, but is likely peaking, said Michael Walden, an economics professor at NC State University.
“In the time off during the pandemic — and with financial support — people had time to think about their future, and many concluded they wanted to start their own business,” Walden said. “Borrowing costs were also at historically low levels.
“But, with interest rates rising, financial support largely gone, high costs from inflation and fears of a possible recession later this year, I expect the rate creation of new business decreases.”
Keith Debbage, associate professor of geography and sustainable tourism and hospitality at UNCG, warned that the surge in business start-ups “certainly contradicts the long-term trend of declining levels of entrepreneurship in the United States.”
“It is still unclear to what extent the growth of new business creations is a response to an opportunity or the result of a necessity, such as layoffs.
“During the pandemic, local entrepreneurship may be the only viable and secure source of economic growth for many people – triggered not by a nurturing entrepreneurial ecosystem, but by a strategy of last resort,” Debbage said.
Mark Vitner, senior economist at Wells Fargo Securities, said “the strength of startups reflects growing optimism in the global economy, especially at the local level.”
“Unfortunately, the growth of startups in the first quarter actually reflects growth over the past year and does not reflect the uncertainty that resulted from Russia’s invasion of Ukraine and the Federal Reserve’s hawkish turn. “
A slight increase in business formation filings during an economic downturn or major employer reshuffle is not unusual.
For example, when First Union Corp. purchased Wachovia Corp. in 2001, approximately 1,300 local positions were transferred to Charlotte or eliminated over the next 24 months.
Some former Wachovians left the area in search of similar skilled and paid employment.
Some small businesses, especially community banks, have had access to former Wachovia employees who chose to stay, either to continue raising their families or out of preference for the lifestyle here.
Others have started small businesses or taken on an entirely new direction.
This time around, the availability of federal pandemic compensation has given unemployed or furloughed workers more time to plan their next move, including starting a business.
There has also been a surge in support for entrepreneurs from local groups, such as Winston Starts, Greater Winston-Salem Inc. and the Winston-Salem Downtown Innovation District.
For example, Innovation Quarter (IQ) recently launched its business accelerator initiative that brings together entrepreneurs in the field of regenerative medicine with the RegenMed Development Organization.
The goal is to accelerate technology transfer to patients, also known as going from bench to bedside.
This proximity provides access to high-level biofabrication equipment, industrial expertise and talent to support innovative prototyping and commercial product development via the ReMDO test bed.
The first tenant is BioMedInnovations, which left Raleigh to further develop its technologies into tissue and organ preservation and infusion solutions.
The group is currently focusing on a scaled-down mobile platform, known as a recove, which is designed to extend the time that organs prepared for transplant can travel to a potential recipient. He is seeking clearance from the Food and Drug Administration so he can start focusing on the kidney transplant market.
“Joining the ReMDO Innovation Accelerator space in Winston-Salem has just allowed us to find collaboration, engage in the ReMDO testbed with our devices, and launch faster,” said Carrie DiMarzio, group chief executive. . “We are learning and getting feedback to improve our designs of these devices.”
Gary Green, Chief Operating Officer of ReMDO, said that “With support from WFIRM and many companies in the region that support the field of regenerative medicine in areas such as reagent and diagnostics production, we believe that these companies can successfully commercialize their technologies.
The initiative represents the latest milestone for the research district and the Wake Forest Institute for Regenerative Medicine, some of which date back to the late 1990s.
In May 2020, iQ Healthtech Labs debuted, described as a physical and virtual hub at the crossroads of healthcare and technology.
The hub’s goal is to shorten the product development cycle, this time where the healthcare and tech sectors intersect.
The hub is set up to foster collaborations between IQ tenants, Wake Forest Baptist Medical Center research, traditional and non-traditional partners, commercial markets and potential investors.
One entrepreneurship aid effort that recently debuted is the Winston-Salem Partners Roundtable Fund.
The goal “is to provide meaningful access to capital with the goal of helping start-up companies grow.”
Fund officials are looking for companies ready to make seed investments that will typically range between $100,000 and $300,000, “but have the potential to be larger.”
Businesses must be based or committed to relocating to Winston-Salem and/or Forsyth County to be eligible.
Fund officials said the initiative “is independent of industry, but preference will be given to startups in industries in which Winston-Salem has expertise.”
This includes healthcare, information technology, data analytics, apparel, education, virtual reality, automotive technology, and unmanned aviation.
The companies selected will have access to the management expertise of more than 60 accredited fund investors.
During an investment round, the fund may require participants to allow a representative to serve on its board of directors or to hold a formal observer role.
“Some of the most innovative new ideas in many industries are developed here, and our network of entrepreneurs helps these ideas grow into successful businesses,” says Steve Lineberger, who is a partner in the fund.
For more information about the fund, visit www.wsprfund.com or email Clay Johnson at [email protected]
Meanwhile, the city of Winston-Salem is in the middle of its Small Business Plan competition, sponsored by its Office of Business Inclusion and Advancement.
The aim is to promote job creation and small businesses by helping entrepreneurs develop sound business plans. Two winners will each receive a grant of $5,000 for start-up costs, up to $5,000 in a possible matching micro-loan and technical assistance.
Eligible submissions must be for micro-enterprises (five employees or less) located in the strategic neighborhood revitalization area. This area includes parts of the northern, southern, and eastern quadrants of the city.
Businesses must also create low-to-middle income jobs or benefit low-to-middle income residents. Staff from the office’s Business Development Division will be available to provide assistance throughout the competition.
The top finalists will have the opportunity to submit full business plans in June.
Finalists will be judged by the Small Business Loans Committee and the winner will be announced in August.