Business Owner Perceptions of COVID-19 Effects on the Business: Preliminary Findings A nationally representative survey of 850 business owners conducted between April 7 and June 2, 2020, reveals changes in the perception of the business environment under COVID-19 conditions. Share: Facebook LinkedIn Twitter Download the Brief Business Owner Perceptions of COVID-19 Effects on the Business: Preliminary Findings | Trends in Entrepreneurship, No. 10 pdf The rapid changes brought about by COVID-19 have also induced fast, and sometimes large shifts in the business environment. A nationally representative survey of 850 business owners conducted between April 7 and June 2, 2020, reveals changes in the perception of the business environment under COVID-19 conditions. Business owners included in the survey held current or recently closed businesses, and were included regardless of registration, employer status, business size, and revenues. Highlights Business owners generally perceived the effects of COVID-19 on their businesses to be negative, with a small share reporting positive effects.Bi-weekly examinations of business owner perceptions show that they can change rapidly.Negative demand and supply effects of COVID-19 are substantial. Demand effects are more often reported than supply effects.Perceptions of challenges under COVID-19 have shifted in different directions. One key challenge – finding customers – is more likely to be a problem because of COVID-19, whereas another key challenge – skilled employees – is less likely to be problematic. Effect of COVID-19 on Business and Industry A majority of business owners (57%) indicated that COVID-19 had a negative effect on their business. Similarly, more than 6 out of 10 business owners perceived a negative effect on their industry (63%). A substantial share of business owners indicated a neutral effect on their business and industry: 29% and 22% respectively. A relatively small but not unremarkable share of business owners indicated a positive effect on the business (14%) and on their industry (15%). Figure 1 | Effect of COVID-19 on Business and Industry A majority of business owners (57%) indicate that COVID-19 has a negative effect on their business. A bi-weekly examination of the perception of COVID-19 effects reveals some variation. No less than half of the business owners reported negative effects overall in each bi-weekly period, including about 6 in 10 between April 20 and May 3 (61%) and May 4 to May 17 (57%). Reporting of extremely negative effects was 40-41% between April 20 and May 17, and lower in the period May 18 to June 2 (28%). Reporting of extremely positive effects was relatively low throughout, with an uptick in the period of April 20 to May 3 (12%). Figure 2 | Effects of COVID-19 on Business, Bi-Weekly Effects of COVID-19 on Demand and Supply Perceptions A closer look at some of the effects of COVID-19 reported by business owners reveals important dynamics related to demand and supply. Overall during the eight-week study period, almost 6 in 10 business owners reported decreased sales or revenues (58%) and nearly half reported decreased overall demand (49%). This compares to almost 1 in 10 that reported increased demand (9%) and increased sales or revenues (9%). With respect to supply perceptions, almost 3 in 10 business owners reported more difficulty accessing materials and goods (28%), while a small share reported easier access to materials and goods (3%). Bi-weekly trends reveal quick responsiveness of business owner perceptions to the external environment. The time between April 6 to April 19 and April 20 to May 3 appear to have been particularly difficult for sales and revenues. Difficulty accessing materials and goods for the business was highest during April 20 and May 3. April 6 – April 19: 60% of business owners reported decreased sales or revenues, 44% reported decreased demand, 17% reported difficulty accessing materials and goods for the business, and 16% reported increased demand for the business.April 20 – May 3: 60% of business owners reported decreased sales or revenues, 51% reported decreased demand, and 35% reported difficulty accessing materials and goods for the business, and 11% reported increased demand.May 4 – May 17: 47% of business owners reported decreased sales or revenues, 43% reported decreased demand, and 19% reported difficulty accessing materials and goods for the business, and 9% reported increased demand.May 18 – June 2: 51% of business owners reported decreased sales or revenues, 41% reported decreased demand, and 26% reported difficulty accessing materials and goods for the business, and 9% reported increased demand. Table 1 | Bi-Weekly Demand and Supply Chain Perceptions of COVID-19 on Businesses i Figure 3 | Bi-Weekly Demand and Supply Perceptions of COVID-19 on Businesses Bi-weekly trends reveal quick responsiveness of business owner perceptions to the external environment. The time between April 6 to April 19 and April 20 to May 3 appear to have been particularly difficult for sales and revenues. Difficulty accessing materials and goods for the business was highest during April 20 and May 3. There are also important differences in business owner perceptions based on business age. Owners of businesses less than one year old tended to be less likely to report decreased sales or revenues than in older businesses, and somewhat more difficulty accessing materials and goods. Interestingly, owners of these newest businesses were most likely to report increased sales or revenues (23%), which is more than twice what was reported by owners of businesses 1-5 years (10%), more than three times what is reported by owners of businesses 5-10 years (7%), and more than four times what was reported by businesses older than 10 years (5%). Owners of businesses aged 1-5 years tended to report being impacted more on some of the demand and supply dimensions than in other businesses. Table 2 | Demand and Supply Perceptions of COVID-19 on Businesses, Business Age Figure 4 | Demand and Supply Perceptions of COVID-19 on Businesses, Business Age Effects of COVID-19 on Perceptions of Challenges Faced by Business Owners Challenges facing business owners are shaped to a large extent by the external environment. A comparison of the challenges facing business owners prior to COVID-19 and during COVID-19 reveals a shift in the perception of several key challenges, as shown in Table 3 and Figure 5 below. Prior to COVID-19, business owners faced substantial challenges related to finding customers (62%) and skilled employees (53%). Under COVID-19 conditions, finding customers was reported by 72% of business owners. Skilled employees was reported by 36% of business owners as a challenge – a substantial change from pre-COVID-19 conditions, and not especially surprising given the rise in unemployment brought about the pandemic. This also represents the largest shift in perceptions of challenges among business owners. Self-doubt and fear seemed to be more present among business owners, with half of business owners reporting this as a challenge under COVID-19 conditions (50%). This reflects an increase of 8 percentage points before the pandemic (42%). In addition, business owners reported that finding time to devote to the business has become less problematic: 31% compared to 39% before the pandemic. Some of the challenges that have become somewhat more difficult include funds to grow the business, location, region or geography, and inclusion. Some challenges that have become somewhat less problematic for business owners are networks and connections and mentors. Table 3 | Challenges Facing Businesses: Pre-Pandemic and Pandemic Figure 5 | Challenges Facing Businesses: Pre-Pandemic and Pandemic About the Data The data come from nationally representative surveys conducted by Global Strategy Group with 850 business owners during the eight-week period between April 7 and June 2, 2020. Adjusting for demographics and sampling strategy results in a weighted sample size of 800 entrepreneurs. Descriptive statistics reported here use population weights. The data in surveys is self-reported by the business owners and provides insight into their perceptions; it does not condition on whether a business is registered or unregistered, or if it is an employer or not. Therefore, the figures reported here include self-employed sole proprietors as well as owners of businesses with employees. Note that this reflects business owners, and is not a representative sample of businesses by industry, size, or other business-specific characteristics. Pre-pandemic data come from a similar nationally representative survey with 405 business owners in late 2019, reported in Looze and Desai (2020)1. Notes: (i) The period May 18 – June 2 is longer than other periods to meet response targets. Sources: (1) Looze and Desai. 2020. Challenges along the entrepreneurial journey: considerations for entrepreneurship supporters, Ewing Marion Kauffman Foundation. Acknowledgements: Sameeksha Desai, Jessica Looze Please cite as: Ewing Marion Kauffman Foundation (2020) “Business Owner Perceptions of COVID-19 Effects on the Business: Preliminary Findings”. Trends in Entrepreneurship, No. 10, Kansas City, Missouri. This is a publication by the Ewing Marion Kauffman Foundation utilizing content and data from multiple sources and external contributors. Every effort has been made to verify the accuracy of the information contained herein, and it is believed to be correct as of the publication date. Nonetheless, this material is for informational purposes. Readers are solely responsible for validating the applicability and accuracy of the information in any use they make of it.
Who is the Entrepreneur? Race and Ethnicity, Age, and Immigration Trends Among New Entrepreneurs in the United States, 1996–2019 Learn more about the trends in race and ethnicity, age, and immigration among new entrepreneurs in the United States between 1996 and 2019. Share: Facebook LinkedIn Twitter Download the Brief Who is the Entrepreneur? Race and Ethnicity, Age, and Immigration Trends Among New Entrepreneurs in the United States, 1996–2019 | Trends in Entrepreneurship, No. 9 pdf Featured highlights: The share of all new entrepreneurs who are Latino more than doubled between 1996 and 2019 while the share who are White decreased over the same period.New entrepreneurs were largely young in 1996, and were more likely to represent all ages by 2019.In 2019, about 1 in 4 new entrepreneurs was an immigrant. This is close to twice the share of entrepreneurs that were immigrants in 1996. Download the Brief [PDF]
New Business Applications in the Heartland: Early 2020 Weekly Trends During the COVID-19 Pandemic Business responses to COVID-19 are rapid and can change quickly. This brief takes a closer look at how new business applications vary by geography in four Heartland states (Iowa, Kansas, Missouri, and Nebraska) between mid-January and late May 2020. Share: Facebook LinkedIn Twitter Download the Brief New Business Applications in the Heartland | Trends in Entrepreneurship, No. 8 pdf The overall trends show that entrepreneurs respond quickly – even on a weekly basis, and sometimes sharply – to changes in the COVID-19 environment. Featured highlights: Over the 19-week period, new business applications increased by 5.34% in Missouri and declined by 19.57% in Iowa, 8.33% in Kansas, and 9.68% in Nebraska. This compares to an overall national decline of 4.81% over the same period.Missouri has more new business registrations than the other three states, which is not surprising given the size of the state economy and population.New business applications respond quickly, with substantial week-to-week variation that is not apparent when examining the overall trends.Kansas and Missouri largely trend in the same direction with the national trend. Download the Brief [PDF]
Challenges for Entrepreneurs in the Heartland How do entrepreneurs in the Heartland – Kansas, Missouri, Iowa, and Nebraska – perceive challenges compared to entrepreneurs nationally? We asked Heartland and nationwide entrepreneurs to rank the order of the three to five most challenging barriers from a list of 13 barriers to discover what matters most to them. Share: Facebook LinkedIn Twitter Download the Brief Challenges for Entrepreneurs in the Heartland | Trends in Entrepreneurship, No. 7 pdf Featured highlights: Entrepreneurs in the Heartland and nationally most commonly report that finding customers is challenging – about 6 in 10 entrepreneurs in the Heartland and across the country.In the Heartland, funds to start the business is a challenge among 54% of entrepreneurs and funds to grow the business is a challenge among 60% of entrepreneurs, compared with 46% and 49% of entrepreneurs nationally.Laws, policies, and regulations are a challenge for 55% of Heartland entrepreneurs, compared to 46% of entrepreneurs nationally. Barriers to being an entrepreneur include: finding customers; funds to grow the business; laws, policies, and regulations; self-doubt and fear; skilled employees; information, education, and knowledge; networks and connections; mentors who can provide guidance; location, region, or geography; time to devote to the business; social support; and inclusion. Download the Brief [PDF]
Characteristics of the Large Early 2020 Decline in New Businesses during COVID-19 This working paper analyzes one important factor of entrepreneurship – new business applications – in the first 16 weeks of 2020 and historically. Week 16 in 2020 ended on April 18. Share: Facebook LinkedIn Twitter Download the Paper Characteristics of the Large Early 2020 Decline in New Businesses during COVID-19 | Research Working Paper Series pdf The impact of COVID-19 on entrepreneurial activity in the United States has immediate implications for business owners and their employees, as well as consequences for long-term economic recovery. Included in the PDF: Business applications in recent years.How business applications in the first 16 weeks of 2020 compare with recent “normal” years.Discussion points.Resources. DOWNLOAD THE WORKING PAPER [PDF]
Interest in Starting and Closing a Business: Google Searches in the COVID-19 Context Given the rapid and widespread changes in the economy due to COVID-19, internet searches may offer some insight into how people are thinking about their current economic situation. This brief looks at trends in Google searches related to entrepreneurship. Share: Facebook LinkedIn Twitter Download the Brief Interest in Starting and Closing a Business: Google Searches in the COVID-19 Context | Trends in Entrepreneurship, No. 6 pdf Examine search trends associated with three topics – new business help, new business exits, and new business opportunities – from January 2019 to April 29, 2020, to get a sense of relative interest during “normal” conditions and in the COVID-19 context. Featured highlights: Between January 1, 2019, and April 29, 2020, interest in Google searches related to new business help was highest in the weeks of March 16, March 30, and April 20, 2020, respectively.Over the same period, interest in Google searches related to new business exit was highest during the week of March 16, 2020.Interest in Google Searches for open a business, new self-employed, and new small business was highest in the week of March 23, 2020, and interest in searches for independent contractor and how to work for yourself were highest in the weeks of March 30 and April 13, 2020, respectively. Download the Brief [PDF]
Mentoring in Entrepreneurship Support: Some Basics Mentoring is offered as a feature to support entrepreneurs in a variety of entrepreneurship support programs, including incubators, accelerators, small business chambers, and entrepreneurship education initiatives. Mentoring is a popular entrepreneurship support intervention, and it can be offered either as a main focus or as one of several features in a package of offerings. Share: Facebook LinkedIn Twitter Download the Brief Mentoring in Entrepreneurship Support: Some Basics | Entrepreneurship Issue Brief pdf Starting a new business can be difficult. It often requires gathering information and attaining specialized knowledge, as well as developing new skills and connecting to a variety of individuals and resources. Mentorship is widely seen as a way to support entrepreneurs by connecting them with the information, resources, and networks they need, including partners, customers, and investors. Mentorship can provide feedback, reassurance, and motivation to help entrepreneurs solve problems and navigate the challenges of starting and growing a business. They can also serve as role models for entrepreneurs. Does mentorship matter… For entrepreneurial aspirations and starting a new business?For business growth and survival?For entrepreneurs’ abilities and self-confidence? What does this mean for entrepreneurship supporters? Download the Brief [PDF]
Early-Stage Entrepreneurship in the United States: National and State Report (2019) This report presents national and state level trends in early-stage entrepreneurship for the years 1996-2019 in the United States, as well as trends for specific demographic groups when possible. Share: Facebook LinkedIn Twitter The Kauffman Indicators of Early-Stage Entrepreneurship is a set of measures that represents new business creation in the United States, integrating several high-quality, timely sources of information on early-stage entrepreneurship. This report presents four indicators that track early-stage entrepreneurship for the years 1996-2019: rate of new entrepreneurs reflects the number of new entrepreneurs in a given month, opportunity share of new entrepreneurs is the percentage of new entrepreneurs who created their businesses out of opportunity instead of necessity, startup early job creation is the total number of jobs created by startups per capita, and startup early survival rate is the one-year average survival rate for new firms. National and state level trends are reported for all four indicators. In addition, demographic trends are reported for the rate of new entrepreneurs and opportunity share of new entrepreneurs. Report Highlights: Nationally, the rate of new entrepreneurs in 2019 was 0.31%, meaning that an average of 310 out of every 100,000 adults became new entrepreneurs in a given month. The rate of new entrepreneurs in 2019 ranged from a low of 0.17% in Rhode Island to a high of 0.47% in Florida. The median for states in 2019 was 0.30%, reflecting 300 out of every 100,000 adults. The opportunity share of new entrepreneurs nationally in 2019 was 86.9%. The opportunity share of new entrepreneurs ranged from a low of 71.4% in Washington, D.C., to 96.2% in South Dakota, with a median of 85.6%. National startup early job creation in 2019 was 5.2 jobs, meaning that the average startup that hired would hire a little over 5 jobs for every 1,000 people. Startup early job creation in Washington, D.C., was 9.4 jobs per 1,000 people, compared to 3.2 jobs per 1,000 in South Dakota, and a median of 4.7. Startup early survival rate was 79.6% in 2019, meaning that almost eight in 10 startups survived the first year. Startup early survival rate ranged from 69.4% in Connecticut to 90.5% in Virginia, with a median of 79.4%. The overall KESE Index – an equally-weighted composite of the four indicators – was 1.2 nationally. The index is normalized at zero. The overall KESE Index ranged from -7.6 in Connecticut to 5.0 in California, with a median of 0.5. Download the Full Report Explore Other Kauffman Indicators Reports
Challenges Along the Entrepreneurial Journey: Considerations for Entrepreneurship Supporters We asked more than 500 entrepreneurs and aspiring entrepreneurs across the United States about the challenges they face to better understand how entrepreneurship supporters can help. Share: Facebook LinkedIn Twitter Download the Report Challenges Along the Entrepreneurial Journey: Considerations for Entrepreneurship Supporters pdf Entrepreneurs have the potential to create new jobs in their communities, bring new products and services to the market, and change the way we lead our lives. But it’s not enough to have a good idea. Some aspiring entrepreneurs encounter barriers that prevent them from ever starting a business. And those entrepreneurs who do start businesses may face challenges that limit the ability of their businesses to flourish. As a result, individuals and communities may collectively lose out on the new jobs, products, services, and innovations that were never created. What are the biggest barriers facing entrepreneurs and aspiring entrepreneurs? Where are they getting stuck? What prevents businesses from getting off the ground? What inhibits the entrepreneurs from thriving? Understanding the barriers entrepreneurs encounter along their journeys can help entrepreneurship supporters – including nonprofits, funders, policymakers, investors, and researchers – better understand how to help entrepreneurs and aspiring entrepreneurs. The full report includes the results from our survey and key considerations for entrepreneurship supporters. Download the report [PDF]
Demand for Business Advice or Mentoring Among Entrepreneurs This brief presents a breakdown of the reasons entrepreneurs seek business advice or mentoring, as well as the sources of mentoring, drawing from the 2016 Annual Survey of Entrepreneurs. The trends explained here are based on the perceptions of the entrepreneurs themselves, which provide insight into how they think about and navigate the process of obtaining business advice or mentoring. Share: Facebook LinkedIn Twitter Download the Brief Demand for Business Advice or Mentoring Among Entrepreneurs | Trends in Entrepreneurship, No. 5 pdf Featured highlights: Half of employer business owners did not seek business advice or mentoring.The most common reason to seek business advice or mentoring was related to taxes and accounting (33.9%), followed by legal (15%), and increasing sales (13.8%).The most common sources of business advice or mentoring were legal and professional advisors, colleagues, and family. This was the case for employer business owners regardless of business age (66.2%, 48%, and 22.3%, respectively), and for owners of businesses less than 2 years old (61.8%, 51.6%, and 30.4%). Download the Brief [PDF]