State hits startup record amid COVID
Connecticut had another record year for entrepreneurship, with nearly 40,000 businesses formed for the single largest annual increase since 1995.
The boom in business registrations occurred in the context of the COVID-19 pandemic, with the Connecticut Department of Labor having received more than a million applications last year for unemployment compensation as workers were furloughed temporarily or permanently.
The Connecticut Secretary of the State’s data includes both businesses that pay wages and shell companies that exist only to hold assets like real estate. In all, the state recorded just over 39,400 new businesses last year, with owners pulling the plug on less than 21,400 for a net gain of about 18,000 new entities.
In addition to any influence by the pandemic, the starts and stops data could have been influenced by a change in Connecticut’s tax code a few years ago that prompted large numbers of businesses to reorganize as limited liability companies. But startup assistance centers say they got large numbers of inquiries last year as workers went into business for themselves, whether out of necessity or opportunity.
“The majority of people who are losing their jobs are definitely women [and] they are women who were hourly wage workers,” said Fran Pastore, CEO of the Stamford-based Women’s Business Development Council which assists en
trepreneurs in setting up businesses and finding support like financing. “And what they are doing to survive is start these small businesses.”
From March through November, Pastore said that
the Women’s Business Development Council saw a sixfold increase in enrollments for its entrepreneurship workshops or one-onone consultation sessions. WBDC is now readying a financial assistance pro
gram that would provide up to $10,000 in funds for entrepreneurs as matches to other startup funds they are able to secure.
Pandemic assistance programs have been focused on helping existing
businesses survive the downturn, to include the Paycheck Protection Program. On Monday, U.S. Department of the Treasury opened a new round of PPP funding with the goal to disburse $284 billion to businesses as forgivable loans, provided they do not lay off employees under the terms of the agreements.
If job one for many firsttime entrepreneurs was scrambling for replacement income after losing a job, others launched businesses as a result of their experiences in the pandemic, including Stamford pharmaceutical sales manager Khandice O’Kelley.
After one of her daughter’s favorite activities was curtailed — trips to the nail salon with mom — O’Kelley researched nail polishes and the two began experimenting with making them, as a break from home schooling. It is now an online business called Pink Chawkulit.
“We launched on ‘Pink Friday’ (Black Friday) and definitely will be here for the long haul,” O’Kelley stated in an email. “We are building our business and getting great feedback from our customers, ... and we are getting more.”
Pastore said O’Kelley is not the only Connecticut entrepreneur to stumble on an idea as a result of altered routines in working or parenting through the pandemic, and discovering a new or better way for a product or service.
“What we’re seeing is exactly that trend — it’s, ‘I have time on my hands, this is something I used to that I can’t do anymore; this is something I like to eat that I can’t go out to have anymore,’ ” Pastore said.