Rise of the “Pandemic Entrepreneur”

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Through the pandemic we’ve witnessed the outsized impact the pandemic has had on small businesses — conditions that spurred government responses like the Paycheck Protection Program to help the segment survive.

But in all the sobering findings, there’s a surprising bright spot: the rise of “pandemic entrepreneurs.”

A pandemic-business boom

Researchers have estimated that there was a 23% uptick in U.S. business start-ups in 2020, compared to 2019. And these enterprises are doing better, too. Our recent State of the SMB Economy Report finds that businesses launched during the pandemic have a survival rate about 46.5% higher than businesses started in 2019.

To better understand business performance, we compared average card revenues and operating status for businesses started in 2020 with businesses started in 2019. We found that businesses in our sample started in 2020 (the 2020 cohort) were more likely to still be operating the following year, compared to those started in 2019 (the 2019 cohort).

Of the 2019 cohort, 41.67% were still operating in Q1 2020, compared to 61.18% of the 2020 cohort that were still operating in Q1 2021.

Comparing monthly card revenues, the 2020 cohort had average monthly revenues 9% higher than the 2019 cohort.

What’s driving the spike?

Why this boom of pandemic startups that are outperforming fellow SMBs?

Some of them may serve needs that emerged from pandemic conditions. Others may offer products or services better suited to digital delivery. Still others may be long-standing “side hustles” that became a business owner’s full focus.

A side hustle story

Greg Fischer is one pandemic entrepreneur who turned his side hustle into a full-fledged business. In September 2020, Fischer and his business partner launched Burn Pit BBQ, a veteran-owned, Wisconsin-based business offering barbecue meat rubs, sauces, apparel, and content for meat grilling and smoking fans.

“We were already experimenting with homemade rubs and sauces as a hobby, and I had experience building side businesses, websites and products,” said Fischer. “The pandemic gave me a lot of time to reflect on my then-career. And at that point we noticed that more people were cooking from home. August 2020 felt like the right time for me to leave corporate America and focus on Burn Pit full time.”

The partners funded their launch with savings, going to market with a website and a few product offerings. Demand has steadily increased.

“We get feedback from consumers that they are looking to spend locally, shop small, and support veterans,” Fischer said. “On the B2B side, we’ve seen an uptick in orders for appreciation kits for remote employees and locally sourced gifts for other businesses.”

As a growing business with a need to stock more inventory, getting access to additional capital has been a challenge. “We had to start with a business credit card, which wasn’t ideal,” Fischer says. “Now we’re looking to open a line of credit through a national bank, and though our revenue growth is there, we can’t show the typical two years of history.”

If the national bank relationship doesn’t pan out, Fischer says he and his partner will explore other options like community banks and veterans organizations that offer grants and loans.

“If I had my choice to fix one challenge of running a small business, it’d be getting access to capital without bringing on more investors,” Fischer said.

The increase in pandemic startups is a positive sign that, despite challenges the pandemic forced upon the SMB segment, the entrepreneurial spirit is still alive and well. And those fledgling pandemic enterprises mean more opportunity for investment at each stage of their journeys.

For more insights on the current SMB economy, explore the full report.

If I had my choice to fix one challenge of running a small business, it’d be getting access to capital without bringing on more investors. —Greg Fischer, co-founder, Burn Pit BBQ


We looked at a sample of 16 million businesses across the United States in our Merchant Transaction Signals dataset. For each of these businesses, we analyzed monthly card revenues based on aggregated credit and debit card transactions from a panel of 700 million anonymized cards.

We defined the beginning of the pandemic in the United States as March 2020, when Covid-19 was declared a national emergency. We looked at monthly gross revenues across all businesses from January 2017 to March 2021. Because card transactions can show high seasonality, all growth rates cited are year-over-year growth rates. To calculate year-over-year growth rates we use the formula (Month 2021 - Month 2020) / Month 2020. If transactions disappeared entirely for more than 3 months, we defined the business as having ceased operations.

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