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Local News

Rise in small businesses and entrepreneurship throughout Michigan

Credit: iStock

Armand Jackson 

While the past two years have been difficult for workers in Michigan, with businesses closing down and laying off employees, along with the global supply chain issues, a new report shows some good news on the new business front. Since 2020, Michigan has witnessed an increase in new small businesses and entrepreneurship. According to the United States Census Bureau’s Business Formation Statistics, Michigan had over 130,000 new business applications in 2020, while Ingham County had 2,903 new business applications that year, a 5.4 percent increase in comparison to the number of applications within the county in 2019.

The data shows a large increase in new businesses between 2020 and 2021 throughout Michigan. In Q1 of 2021, there were a total of 39,977 new business applications, an increase of 17,339 new applications in comparison to Q1 of 2020. In Q2 of 2021, there were 39,851 new applications, an increase of 15,481 in comparison to Q2 2020. Q3 of 2021 had 36,541 new business applications, a decrease of 15,114 in comparison to Q3 2020, and Q4 2021 had 34,452 new business applications, an increase of 184 in comparison to Q4 2020.

According to research by The Pew Research Center, it is possible that the rise in new businesses is linked to workers leaving previous jobs during the pandemic. A survey conducted in 2021 found that the top reasons U.S. workers in various industries left their jobs were low pay, no opportunities for advancement, and feeling disrespected at work. Data by Pew suggests that self-employment was a desirable alternative to traditional work for those who expressed these views, along with wanting to be their own boss or have flexible work hours. 

This uptick in the new business market does not seem to be slowing down. We are at the very beginning of the second quarter of 2022, but this year already seems to continue the trend of new entrepreneurs and small business owners in Michigan, with 11,507 applications sent in January and 11,093 in February.