Startups are way up in Tennessee, nationally amid pandemic

Nationally, Americans filed paperwork to start 4.3 million businesses last year, according to data from the Census Bureau, a 24% increase from the year before and by far the most in the decade and a half the government has kept track. Applications are on pace to be even higher this year.

The surge is a striking and unexpected turnaround after a 40-year decline in U.S. entrepreneurship. In 1980, 12% of employers were new businesses; by 2018, the most recent year for which data is available, that share had fallen to 8%.

Economic upheaval created both challenges and opportunities for business, said Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee.

“As companies shut down, it created a need for people to find other ways to support themselves, and it created new opportunities for business to get done in a different way,” he said.

The COVID-19 virus upended many businesses and careers, cutting nearly 575,000 jobs across Tennessee during the worst of the economic downturn in the spring of 2020. By July 2021, employment had returned to pre-pandemic levels, and many industries were facing a labor shortage.

Besley still has his job as director of community engagement for Chattanooga Prep, a local charter school for boys, but he always encourages people to invest in themselves and their own ideas and passions, he said.

“It runs deep in my roots in my family,” he said. “We all have other businesses outside work. At the drop of a dime, your job can tell you, ‘We don’t need you anymore.’”

The resurgent virus has slowed his business some, but not halted it, he said.

“I still get calls, and I still push safety when I’m doing my events,” he said.

He also sought expert help in setting up the business, working with Launch Chattanooga to build a business plan, Besley added.

“The pandemic helped push me to do my own thing. It helped me lock in and build my business plan. It forced me to put some things down that were holding me back,” he said.

Hal Bowling, co-founder and executive director of small business booster Launch Chattanooga, said the pandemic drove demand for the nonprofit organization’s services.

“We continue to experience high demand for training and support and are up more than 50% from pre-pandemic years in terms of the number of entrepreneurs we are working with,” Bowling said. “I believe the pandemic is bringing more people out to start a business during a time when things are very uncertain and entrepreneurs are coming up with solutions to address new community needs.”

Gloria DuBose worked for nine years at the nonprofit Bethlehem Center in Alton Park before she switched gears this summer to focus on her love of preparing healthy, creative food from a wide variety of cultures.

“I’d been thinking about it for a while, but I think the pandemic really made me evaluate what my priorities were and what allowed me to thrive,” she said. “My faith is pretty important to me. I felt like God was putting pieces together.”

DuBose went to work in the kitchen of local vegan eatery Southern Squeeze and launched her Crossing Borders meal prep business in May. She’s working now with friends and family as she builds a business plan and gets certifications in nutrition, DuBose said.

“I was at the Bethlehem Center for years, and it was so great, but toward the end I thought it was time to transition to do something else,” she said. “I felt like I had some gifts and experiences I wasn’t getting to use.”

For Besley, one benefit of working with young men and being an entrepreneur is sharing the message with them, he said.

“I just want to push people to have their own — go out and have your own,” Besley said. “Figure out what you love to do, how you’re going to do it, when you want to do it, and get out there and do it.”