Ohio business startups surged during pandemic, but will they last? – The Columbus Dispatch

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Ohio business startups surged during pandemic, but will they last? – The Columbus Dispatch

Nicole Spears started looking for a new job around April of last year, just after the COVID-19 pandemic struck Ohio and most nonessential businesses w

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Nicole Spears started looking for a new job around April of last year, just after the COVID-19 pandemic struck Ohio and most nonessential businesses were closed.

The search proved fruitless.

“I wasn’t able to find anything that sounded like it was going to be what I wanted to do,” she said. “And I was feeling the job I had at that point wasn’t a good fit for allowing me to balance what I wanted in my personal life with my professional life.”

So the Columbus woman went into business for herself, registering Nicole Spears LLC with the Ohio Secretary of State’s office in October. She works from home on her own schedule providing content strategy and copywriting services for tech and healthcare companies.

“It seemed really counterintuitive to make that change while a lot of peers or people that I work with were having trouble finding work,” she acknowledged.

Nevertheless, plenty of Ohioans are joining Spears: The state has seen record numbers of business startups in recent months.

After dropping initially at the onset of COVID, the number of new business registrations has been breaking monthly records since last spring, according to the Secretary of State’s office. In April, 22,176 new businesses were registered, surpassing 20,000 for the first time in state history.

No one is entirely sure what it all means, but aspiring entrepreneurs cite the desire for greater flexibility and independence, something they’ve enjoyed while working from home.

The Secretary of State’s figures are not a perfect measurement. Registering a new business isn’t the same as getting it up and running, and other indicators tell a different story. The Ohio Bureau of Worker’s Compensation, for example, opened 21,398 new workers’ compensation insurance policies in 2020, compared to 22,728 in 2019. That measurement is also imperfect because many businesses buy private insurance plans.

But Ohio’s registration numbers mirror nationwide trends. Research by the Peterson Institute for International Economics found Americans started 4.4 million businesses in 2020, a 24% increase over 2019, and the largest year-to-year increase on record. The institute relied on U.S. Census data.

It’s unclear how many jobs the startups created. Several new entrepreneurs told the Columbus Dispatch their businesses have no other employees.

Why so many startups?

Experts stress that it’s too early to determine the impact of the startup surge. Registering a new business is a relatively painless process, requiring only a small registration fee and some light paperwork. Getting a business up and running successfully, on the other hand, requires capital, mountains of forms to fill out, and a search for receptive customers.

“Most startups don’t go anywhere,” said Jay Anand, a business professor at Ohio University. “They are fantasies or dreams, something that doesn’t pan out.”

Time will tell if the business owners who registered in the past few months can succeed.

“Do they go back to work (once the pandemic is over) or do they have a sustainable business?” asked Kirk Kern, director of the Paul J. Hooker Center for Entrepreneurial Leadership at Bowling Green State University. “Within the next six months to a year, we will see some of these companies start to fold.”

Does this have anything to do with the pandemic?

Anand attributed the rise in registrations to an excess of free time.

“People who are working at home save up to two hours a day, an hour commuting, and another hour getting ready,” he said. “And when all these other activities (like dining in restaurants or going to parties) are cut out, what are you going to do with yourself?”

That’s when workers start thinking about what they really want to do with their lives, Anand said.

And with more free time, some Ohioans turned hobbies into careers, Kern said.

“They’re baking goods or building crafts because they’ve got the time,” he said. “And then they say, ‘I’ve baked these cookies, and I put them on Facebook, and I’ve got people that want to buy them.’ ”

Suzanne Venesile, a nurse practitioner who started the Northeast Ohio-based SV Medical Aesthetics in October, wanted to offer non-surgical cosmetic procedures like Botox, but never had the time for the necessary training. Then the pandemic cleared her social calendar.

“I’ve always been thinking about getting something started on my own,” she said. “And during the pandemic, I found I had more time to do that.”

This isn’t the first time new businesses surged during a recession, experts said.

“Historical research shows when you have an economic downturn of some sort, entrepreneurial activity tends to increase,” said Vince Lewis, a director of the L. William Crotty Center for Entrepreneurial Leadership at the University of Dayton. “People are laid off, they’re getting unemployment (or stimulus checks), and they’re looking for some other opportunities.”

But not every economic crisis is created equal. New business registrations fell during the housing crisis of 2008 and 2009. Then Greece saw a rise in entrepreneurship during its economic crisis in the early 2010s, said Michael Goldberg, an associate professor in the Weatherhead School of Management at Case Western Reserve University.

“The pandemic had additional elements which I think potentially spurred people on to new business creation,” he said. “One was the desire for that increased flexibility going forward.”

Data provided by the Secretary of State’s office includes little more than the names of newly registered businesses and many don’t have a web presence, making it difficult to glean much information about the startups.

The few business owners who did respond to messages from The Dispatch ran a variety of companies. But all of them described the desire to turn passions into business opportunities.

Who are these new business owners?

Trey Roudebush sold creatively-shaped nightlights through Etsy before incorporating his company in October. 

“I came up with this design, and I was selling them to friends and family,” he said.

A full-time student at Cedarville University, Roudebush registered the company so he could sell his goods on a larger scale and collaborate with Nashville-based band the Rend Collective.

College friends Bri’on Whiteside and Jerrod Poole, who live in Toledo, started the greeting card company SimplyPUT last year.

“We’re both big card givers, and so he had the idea, with his artistic expression, to put out a collection of cards,” Whiteside said.

Both of them still work their full-time jobs, but “working remotely, I had a bit more time on my hands,” Whiteside said.

Interest in their business is strong, they said. The business partners gave away Valentine’s Day cards to community organizations and appeared in a spot on a Toledo TV station.

Poole, an artist and graphic designer, came up with the idea well before the pandemic. He asked Whiteside, a writer, to craft the copy for each card, and they sold their first batch around Father’s Day.

Aspiring entrepreneurs were hesitant to start their businesses during a financial crisis but said their ventures require a measure of faith.

“Anything is possible with the right amount of hard work and patience,” Poole said.

Donald Smith, who owns Hometown Repair in Coshocton, echoed those thoughts. By his own admission, he took a gamble pouring his savings into the repair shop before opening it in November but remained resolute in the face of the pandemic.

“I’ve got a family,” he said. “I have a fiancée and I have a child and one on the way, so it was a huge risk for me.”

Smith’s business partner is certified to fix small engines vehicles like dirt bikes and lawnmowers, and customers weren’t getting those fixed early in the pandemic, but returned as the economy improved, and lately the shop has been slammed, he said.

pcooley@dispatch.com

@PatrickACooley

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