The struggle was real for American workers in 2020. More than 9 million employees ages 16 to 64 faced devastation as they lost their jobs because of COVID-19. The unemployment rate in the United States catapulted from 3.8% in 2019 to 8.6% in 2020.
At the same time, small businesses became straight fire as they were created from the ashes of a wounded workforce. Salesforce, the cloud-based software company, recently conducted a survey of 206 new entrepreneurs to outline the factors influencing this shift in economic growth. It found that 32.9% of new entrepreneurs started their business during the pandemic because they were furloughed or laid off.
This new wave of small businesses shared many interesting qualities as the global pandemic revolutionized the ability to be flexible with digital technology. Here are some of the findings:
- 80% are solely direct-to-consumer.
- 70% of the businesses had “Digital First” methodology.
- 73% of COVID-19 enterprises have customers purchasing from them.
- 30% of these ventures never plan on having a storefront.
- 22% of new entrepreneurs started their company with less than $1,000.
- 30% of the startups only had $1,000 to $10,000.
As new businesses formed in remote settings, many utilized digital technology to support their operations.
- 81% of companies used virtual communication platforms such as Zoom, Slack, Microsoft Teams, and Google Hangouts to connect.
- 57% operated with financial management software such as QuickBooks, Xero, or Sage.
- 46% of these organizations used digital resources such as Salesforce or Zendesk to manage sale and customer management.
- 37% of companies turned to web-based systems such as Indeed, Paycom, or Workday for their human resources.
- 35% employed project management software such as Basecamp, Trello, and Asana.
- 35% of ventures took advantage of security and IT services online such as CCLeaner, Ninite, and LastPass.
A total of 4.4 million new small businesses were created in 2020, according to a study by the Peterson Institute for International Economics, a whopping 24% increase from 3.5 million in 2019.