New business growth in Columbia last year slashed nearly in half by COVID-19 pandemic
The coronavirus stifled new business growth in Columbia last year, with hundreds fewer businesses opening in the capital city than would have been expected.
The number of new businesses that received licenses to operate in Columbia in the first 10 months of 2020, amid the pandemic-induced economic recession, was barely more than half the number of new businesses that received licenses in that same period the previous year.
More than 1,200 new business licenses were granted in the city in all of 2019. And in the first two months of 2020, the city looked to be on track to exceed that number, with new licenses jumping by 16% and 15% in January and February, respectively, according to a list of newly issued business licenses provided by the city of Columbia.
But in March, the coronavirus pandemic prompted a swift wave of business shutdowns, furloughs and layoffs across the state, predictably stifling new business growth at the same time. Columbia saw a 44% decrease in the number of new business licenses issued in March 2020 (73 licenses) compared to March 2019 (130 licenses).
The decline was much worse for the next three months, with dropoffs in new business licenses as high as 76% compared to 2019.
Just 98 new business licenses were granted between April and June, fewer than the number of licenses granted in January (142) or February (99) alone.
The dates when business licenses were issued do not necessarily correspond to the dates when businesses actually opened, but they are an indication of growth in business activity.
New business applications appeared to rebound in late summer moving into the fall, though they remained far below 2019’s numbers.
In total, the city issued 619 new business licenses between January and October 2020, the last full month for which The State received data. It was a 46% decrease from the same time period the previous year.
“We had to immediately adjust to handling business differently, the virtual way,” said Lakesha Shannon, a business license administrator for the city of Columbia.
Shannon said the biggest difference she noticed last year, besides the severe drop in volume of new business licenses, was a shift from brick-and-mortar business openings to more home-based businesses.
The majority of new business licenses, both before and during the pandemic, were issued for manual labor services such as construction, cleaning, general contracting, plumbing and electrical work. While there was still a marked drop in the number of new businesses of this kind from March onward, dozens of new services entered the market even as the pandemic worsened.
Personal service-oriented businesses, such as fitness, hair and other salon services, took the worst hit during the spring and early summer but appeared to rebound, relative to other types of businesses, in the second half of the year.
Retail-oriented businesses saw a particular increase in new licenses in the second half of the year, corresponding with the reopening of the weekly Soda City Market downtown. Many of the new retail business licenses were granted to Soda City and online vendors.
Shannon said she believes the trend in new home-based and creative-oriented businesses has been borne out of the pandemic and is likely to continue in 2021.
“The pandemic did bring out a lot of entrepreneurial spirit in people that we’ve never seen with home-based businesses before,” Shannon said. “We expect that trend to continue ... with people trying to find other ways and other means of income.”
