Business creations in times of COVID-19: what is the finding in 2021?
Business start-ups are good indicators of a country’s economic health. They show the evolution of a market, the changes in the needs of the population, the new trends. With the pandemic, the new business landscape has undergone a significant transformation. Some businesses are closing, others are being created. Some professions are emerging, while others, until then in the spotlight, are more withdrawn. The labour and business creation market is evolving towards a new model that is tending to become sustainable in the years to come. Is this the right time to become your own boss, and to undertake?
Business creations, the shift begun in 2020
Without a doubt, the year 2020 marks the transformation of the labour market. In the spring of 2020, on the occasion of the first wave of the pandemic in France, companies are going through a difficult period. 73% of companies report a drop in sales of more than 10%. 35% even say they have a drop in their income of more than 50% during this period.
One of the reasons for this is the closure of many businesses, including non-food businesses. For more traditional companies, there are fewer customers due to a lack of activity. Setting up partial activity also does not help to maintain an activity. However, business creation increased by 4% compared to the same period in 2019. This represents the creation of 843,164 new businesses over the year, i.e. more than 32,900 than in 2019. The market for new businesses is particularly driven by micro-entrepreneurs, who account for 9% of business creations in 2020.
More businesses are being created than ever before, which may seem surprising given the current economic and health context. However, it has never been easier to create your business, thanks to digital tools. This is possible thanks to platforms such as Portail Auto-Entrepreneur,to become your own boss. All the steps are done online, which makes business creations much faster.
On the other hand, in 2020, the creation of traditional companies experienced a significant fall: -13%. This represents a decrease of 12,600 new businesses. The process is more complex, and creating jobs in these times is not necessarily as easy as in more traditional times. Also, turning to the creation of a sole proprietorship is an attractive solution to get started without taking risks.
Sectors that are doing better in the midst of the pandemic
The COVID-19 pandemic is having a significant impact on changing the business creation landscape. The period is conducive to the creation of individual companies, to develop new activities without taking risks. As discussed earlier, creating your micro-business is easy online. Other platforms offer the same solutions for entrepreneurs wishing to create other forms of business. Thus, on Simplitoo,future entrepreneurs can create a EURL, a SASU, an SARL, a SAS or a SCI. All online.
These facilitated approaches then make it easier to get started, in a context where certain sectors of activity are gaining the upper hand and dominating the market. Sectors that have been able to evolve and adapt to the market, and to the new measures related to the pandemic.
The sector that is most successful is transportation and warehousing. Indeed, the pandemic and the lockdown have caused the temporary closure of many non-food businesses, deemed “non-essential”. Faced with the rise of online sales platforms such as Amazon, these companies have followed the same path launching into online sales… And who says sale, also says needs logistics to deliver at home. The transport sector is therefore seeing the creation of 18,000 new companies in 2020, an increase of 22%… After a first significant increase of 25% in 2019. The sector then represents no less than 12% of the total creations of companies in France over the year.
Another sector that is experiencing a surge: the trade. Between 2019 and 2020, it saw an increase in business creations of around 9%. Surprisingly, despite the closure of non-food shops, new businesses in the sector represent 15% of the creations of 2020… Distance sales on catalogues, in particular demonstrators, are very successful. Companies under the status of micro-entrepreneur, more comfortable to secure an activity and an income.
Business creations, the evolution of traditional professions
The evolution of the sectors impacts the economy and the distribution of activity in France. Real estate is one of the most promising sectors of the country’s economic recovery, along with trade and transport. Indeed, it has been able to adapt quickly to the new health constraints, particularly related to confinement and distancing. In 2020, the sector sees 3,300 business creations linked to this sector, including 2,500 real estate agencies. Agencies that turn without difficulty to a digitalized mode of operation.
Real estate continues to operate despite the health context. Indeed, everything is done to ensure that the transactions continue. The effects of the lockdown are encouraging urban populations to change their horizons for a better living environment. Also, turning to real estate investment seduces, because of its attractiveness (low interest rate, maximum debt rate revised upwards)… But also to access the property in a more spacious accommodation.
Digital will certainly have a greater presence than ever before in companies in 2021 and beyond. Already underway in some sectors, the digital transition will play a decisive role in the future of companies. Especially since the creators of individual companies are younger and younger, and are committed to exploiting digital in their strategy.They are on average 36 years old, and the share of under-30s continues to grow: from 38% in 2019 to 41% in 2020.
Are we also moving towards a world where women’s entrepreneurship is anchored in mores? To date, 4 out of 10 sole proprietorships are women, or 39% of new businesses. Business creations that evolve, suggesting a new operation and a new landscape for 2021… and after.
” [Le chiffre du mois] + 4% of business creations in 2020 compared to 2019.” Study All the Franchise of March 5, 2021
“Solidarity Fund component 1: eligible VSEs.” BPI France notice updated on May 31, 2021
“The impact of the health crisis on the organization and activity of companies.” INSEE study published on 10 December 2020
“Rebound in business creations in February 2021.” INSEE study published on 12 March 2021