Entrepreneurs are a hardy breed. They’re used to overcoming challenges and quickly pivoting, and at no time in recent history has the world needed those qualities more.
While the circumstances of the last 20 months have been challenging, those with an entrepreneurial mindset have adapted to overcome each successive obstacle. Even large companies have begun to recognize the value in thinking entrepreneurially.
Expedited innovation
When the world shut down seemingly overnight, business owners and leaders had to react quickly. Data from McKinsey & Company on global consumer sentiment shows that consumer and business adoption of new strategies advanced five years in just eight weeks.
From grocery delivery to working from home and online schooling, everyone was asked to adapt like an entrepreneur. New ways of doing things had to be created and implemented, and we found in those early months the value in having an entrepreneurial mindset in everything we do, not just business.
Entrepreneurship-led job creation
Despite many small businesses closing their doors in 2020, the pandemic nevertheless brought an increase in entrepreneurial spirit. Between June and September 2020, more businesses were launched than in any other quarter in U.S. history. This differs from patterns we’ve seen in previous recessions, where startup job creation remains relatively stable in recessionary years. Extra time at home allowed many people to tap into their own creativity and inner entrepreneur—not just for those who were unemployed or pursuing a change, but also those dealing with virtual work.
Dave Lavinsky, GrowThink co-founder, puts it like this:
“I think the mindset for many has become, ‘If I’m going to ditch the office, why not ditch the boss, too?’ And many 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.”
This increase in small businesses helps to bolster the local economy. According to the Microenterprise Collaborative of Inland Southern California’s 2021 Impact Report, over 90% of all businesses in the area are “microbusinesses (less than five employees). Though these businesses are small, they account for 23% of all employment in the region.”
Catherine Marshall, Microenterprise Collaborative executive director, stresses the important role that microbusinesses play:
“Development of microbusinesses is just as vital to a healthy economy and job creation as attracting large organizations to your area. However, microbusiness owners need access to the information, expertise, and capital to grow and succeed.”
Microenterprise Collaborative has helped to create or support over 21,000 jobs in 2020, and is on track to achieve their 2021 goals, according to the report. However, Marshall stresses that it will be important not only to support and educate new business owners, but to help existing microbusinesses cultivate resiliency through financial education, digital literacy, and preparation for transitioning from an entrepreneur to an employer.
More entrepreneurs, new needs
The growing number of entrepreneurs needing business startup and planning support was noticeable across the nation. In 2021, among SourceLink’s network of statewide affiliates, we have seen a 20% jump in the number of entrepreneurs accessing digital resources compared to the same period in 2020.
Business owners accessing these statewide networks showed two main areas of need—business planning (42%) and financial assistance (25%). These concerns were at the forefront of entrepreneurs’ minds as the pandemic forced them to temporarily close their doors.
KCSourceLink, another member of SourceLink’s network, saw similar trends as they regularly surveyed the entrepreneurs in their community throughout 2020. “Their biggest need was access to information on what to do with businesses during the shutdown,” said Jenny Miller, a network builder at KCSourceLink. “Then, funding—how to pay the employees. Finally, business owners were looking for ways to sustain their business in what we quickly learned would be a very different world.”
Rebuilding equitably
The importance of social change through entrepreneurship has also become more widely acknowledged. “Creative problem-solvers have jumped to help, and that certainly is an entrepreneurial impulse,” Karl Ulrich, a professor and vice dean of entrepreneurship and innovation at the Wharton School at the University of Pennsylvania tells Entrepreneur.com. “And some of those efforts will result in business creation.”
The resources, including equitable access to lending, in place to support entrepreneurs are key to effecting this change. 83% of entrepreneurs have no access to bank loans or venture capital at the time of startup, according to research done by the Kauffman Foundation. Black-owned business were disproportionately affected even prior to COVID-19, starting with three times less in terms of overall capital compared to new white-owned businesses.
“COVID didn’t cause problems, it just exposed problems that were endemic in society that we were ignoring. In the age of COVID and the age of protests against police brutality, at no time is that more apparent than today,” said Melissa Roberts-Chapman, senior program officers at Kauffman.
Approaching the future with an inclusive and equitable lens is vital as communities begin to rebuild local economic ecosystems. “For everyone to truly move forward, we must rebuild better and include every sector of our society by closing the capital gap and mobilizing aspiring entrepreneurs and small businesses,” said Philip Gaskin, vice president of entrepreneurship at the Kauffman Foundation.
The future is bright
The entrepreneurial mindset has thrived and become even more important during the pandemic. The need for out-of-the-box thinking and the ability to quickly pivot to meet a need has only grown in the past 20 months.
That same entrepreneurial spirit will drive innovation and change in the future, reinforcing the need for entrepreneurial ecosystems to support the many people who jumped into the world of entrepreneurship during the pandemic.
SourceLink is here to help you support the entrepreneurs in your community. Contact us at [email protected] to learn more about building an entrepreneurial ecosystem to serve those who take opportunities, create jobs and impact their communities.
