As past Missouri Economy Indicators briefs have shown, most small businesses have reopened since COVID-related disruptions emerged this spring, and revenue has begun to recover. However, firms still face challenges, including earning less in sales or deciding whether to close permanently. Even in these difficult times, entrepreneurs have continued to seek opportunities and file applications to start new businesses.
Even in difficult economic times, entrepreneurs see opportunities and start new businesses. In the first 40 weeks of 2020, Missouri had 5.9% more applications filed to start new payroll businesses than the same time in 2019. But past survivability data suggest that about half of those businesses will close within five years.
Although the pandemic has been particularly hard on restaurants, business churn data from previous years provide additional insights into which sectors typically experience higher turnover activity. The accelerated churn of businesses during COVID-19 may look different from the past, but learning about historic business churn provides context for understanding future business growth trends. Read more in the latest Missouri Economy Indicators, here.
Maria E. Rodriguez-Alcalá, PhD
County Engagement Specialist in Community Economic Development
University of Missouri Extension