Ohio entrepreneurs have not let the coronavirus pandemic and economic crisis stop them as they’ve registered a record number of new businesses this year.
Those filings already surpassed last year’s record, according to Ohio Secretary of State Frank LaRose.
“What’s encouraging is that so many people are willing to take the chance on themselves and put themselves out there. It really shows the character of Montgomery County, Ohio, and the United States as a whole,” said Erik Collins, Montgomery County director of community and economic development.
This year LaRose’s office received 145,157 filings for new businesses and nonprofits through October, up from 130,621 filings for all of2019.
A county-by-county breakdown isn’t available because the bulk of new business filings are limited liability companies that do not have to reveal the name or location of the owners, according to Maggie Sheehan, LaRose press secretary.
“Entrepreneurship is still alive and well in America,” said Roger Geiger, Ohio executive director of the National Federation of Independent Businesses.
It might seem counterintuitive that people would start new businesses in the midst of a pandemic that included a months-long shutdown and social distancing recommendations. But those interviewed said it makes sense that people would use this time to start something new, especially if they’ve been laid off or quit to care for children.
“Crisis breeds opportunity. COVID-19 has forced certain people to reevaluate their life plans,” said Chris Kershner, president and chief executive of the Dayton Area Chamber of Commerce. “We are seeing early retirements, entrepreneurs looking for new models and businesses redefining themselves. This leads to new risks, new opportunities and new businesses.”
Pandemic changed plans for new businesses
Among the new businesses that opened in Dayton this year were Connect E-Sports, owned by Mary and Bob Baldino, and Salt Block Biscuit Company, owned by Justin Mohler.
“Definitely starting a business is a leap of faith, and if you didn’t believe in the business model and what you are doing, I don’t think you would ever do it,” Mary Baldino said. “I think it comes down to modifying and hanging on while you can during this time that no one planned for. And planning how you can grow your business out of that and set yourself to grow post-pandemic.”
The shutdown in the spring delayed the openingof both companies and the owners adjusted their original business plans, changes they said they likely will keep.
Connect E-Sports, located at 212 Wayne Ave. in Dayton’s Oregon District, is an e-sports center where people can play games on a computer or Xbox station. It opened in early November.
“When Ohio was locked down in mid-March, we were very close to opening. But we worked with our landlord to kind of halt construction,” Mary Baldino said.
Limited hours, social distancing, and safety and cleaning protocols are in place inside the business. Organized leagues and tournaments will begin in January in-person and online.The pandemic led the Baldinos to addthe play-at-home option, so people can compete with other local gamers at the business or in their homes.
“Without that pandemic, we probably wouldn’t have considered the at-home option,” Mary Baldino said.
Salt Block Biscuit Company is a cafe/bakery/bodega that opened in September at 115 E. Third St. in the Fire Blocks District of Dayton. The economic shutdown stopped construction, and Mohler spent the summer reconfiguring his business plan to include selling groceries.
The company is “hitting our numbers,” he said, and he’s setting up an online ordering system for the gift-giving season. When life returns to normal, Mohler hopes to add night service, get a liquor license and be a part of a downtown that once again bustles with activity.
“I had always wanted to have my own place since I finished culinary school in 2001 and finally was able to accomplish that after being in the business for 20 years,” Mohler said. “From my experience of being in the food industry, I feel I know how it works. I have a great team on my side with marketing. I don’t know what the future will bring, but I see it as positive and I do look forward to growing.”
Small businesses are economic engine
Entrepreneurs and small businesses are often called the lifeblood of the economy, and Geiger said it is a positive sign that people are still taking that chance and starting anew.
“One of the leading indicators of economic recovery is start-up small businesses,” Geiger said. “Am I willing to say this is an indicator of a significant recovery? No. But it will happen.”
RELATED: Thinking of starting a new business? Here are some tips
Only about half of start-ups survive past five years, and Geiger said initial start-up cost is about $5,000 for the average new business in Ohio. But people keep on taking the chance.
“It’s different for every entrepreneur,” Collins said. “For some, it’s the satisfaction of building their own company from the ground up. For others, it might be freedom from working for someone else. Whatever the reason, our small businesses are central to our local economy, and we encourage anyone starting a new business to contact us to help them along the way.”
Collins said the high number of business filings in Ohio “echo what’s happening around the country.”
“People who have been laid off may feel like they can do similar work on their own. Some may have lost their W-2 job, but remained with their companies as contractors, which would require them to file with the Secretary of State,” Collins said. “The pandemic has also created increased demands for products and services that didn’t exist before, or maybe didn’t have the market share that they now have because of the pandemic. There is an increased need for products like face masks and shields, cleaning products and services that allow people to work from home.”
The pandemic created an opportunity for entrepreneurs to fill those marketplace gaps, he said.
“Many people see the opportunities in a tough situation, and we’re glad to see so many people rising up and challenging themselves,” Collins said.
Exploring new ways to make money is a necessity for people hurt economically during the pandemic, said Jeffrey E. Haymond, dean of the Cedarville University School of Business.
“But I suspect we’re also seeing that as more people are working from home, there is an easier opportunity to make a long-dreamed of ‘side hustle’ more possible,” Haymond said. “Many new businesses may not initially require more than the founder’s labor, so it’s easier to get off the ground when you don’t have to be around others.”
That kind of innovation sparked by the crisis makes Haymond believe there will be a strong “other side” fueled by dynamic, creative entrepreneurs.
“The Dayton area economy was created by entrepreneurs and innovators,” Kershner said. “This spirit has never left and we continue to have the best environment to support entrepreneurial growth.”
Tips for new businesses
- Get professional help, including good accounting, legal, insurance and marketing advice.
- Know laws governing your business, including licensing, permits, fees and taxes.
- Establish an annual budget and stick to it.
- Your business plan should be realistic and include an exit strategy.
- Have a plan for growth, managing expenses, resources and inventory.
- Know your competition and differentiate your product or service.
- Marketing should include user friendly, attractive social media platforms and customer e-mail lists.
- Provide excellent customer service.
Source: National Federation of Independent Businesses
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