The Business Formation Boom During A Pandemic : Planet Money : The Indicator from Planet Money After millions of people lost their jobs during the pandemic, many of them started their own businesses. In June people started over 440,000 new businesses. We speak with a hot dog stand owner about his journey and an economist on this trend.

The COVID Small Business Boom

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SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

BRITTANY CRONIN, HOST:

Chris Van Jura can still remember the exact moment when he knew he would start his own business.

CHRIS VAN JURA: And that was May the 22. That was May the 22 when I found the cart.

CRONIN: The cart - it was a food cart, 7 feet by 8 feet, stainless steel, little kitchenette inside and a window to take orders.

VAN JURA: Sitting in the parking lot of the Korean Baptist church on Randolph Road. For four years, it had been sitting there with a for sale sign. So I was like, oh, that's it. And that was it. I didn't look at anything else. Truly, I'm sitting here getting worked up thinking about it.

STACEY VANEK SMITH, HOST:

Chris saw this cart and had a kind of revelation. He'd worked in the restaurant industry for 20 years and was managing a fancy restaurant in Washington, D.C. But he got laid off during the pandemic, and it was a terrible experience. He had a young child and a mortgage, but he wasn't sure what to do. He thought, you know, food service, hospitality - that is what I know.

VAN JURA: No, I'm good at hospitality. I grew up with walking into my grandmother's house, and a plate of food was in front of me within minutes, you know? What - hospitality is a feeling, and I had committed more than half of my life to this industry.

CRONIN: Chris was turning all these things over in his head when he drove by the Korean Baptist church on Randolph Road and he saw the used food cart for sale.

VAN JURA: I went across three lanes of traffic to jump into this parking lot to go look at the trailer. That was the big moment of, like, all right, we can do this.

VANEK SMITH: In that big moment, Chris' business was born. Now, this was in the teeth of the COVID crisis. Thousands of businesses were closing. Economic uncertainty was everywhere. But here's the weird thing. At that moment, millions of Americans were doing exactly what Chris was. They were driving across metaphorical lanes of traffic to start a business of their own.

This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

CRONIN: And I'm Brittany Cronin. Today on the show - the COVID business boom. Why did so many people start businesses at a moment when the economy and the country were in crisis?

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CRONIN: Numbers are out from the Census Bureau today, and last month, people in the U.S. started 448,533 new businesses.

VANEK SMITH: And since the pandemic began last March, Americans have started 6,714,318 new businesses. That is an all-time record.

CRONIN: That is today's indicator - 6,714,318.

VANEK SMITH: And one of those businesses was started by Chris Van Jura. And the business he started was about as far away from haute cuisine that he had been serving in Washington, D.C., as it gets.

VAN JURA: We are a mobile hot dog cart based in Montgomery County, Md.

CRONIN: Hot dogs.

VAN JURA: (Laughter) You could take the kid out of Jersey.

CRONIN: New Jersey, what's up?

VANEK SMITH: So apparently, hot dogs are, like, a thing in northern New Jersey. There's, like, a hot dog culture (laughter).

CRONIN: It's a big thing. They're everything. They're like the air around us.

VANEK SMITH: (Laughter) So, Brittany, you and Chris started talking hot dogs, and you had what I can only really describe as, like, a northern New Jersey hot dog mind meld. Like, I could not understand parts of what you were saying.

CRONIN: I mean, to me, it was just like a regular conversation.

VANEK SMITH: (Laughter).

CRONIN: I grew up going to the Goffle Grill on Route 208 in Hawthorne.

VAN JURA: Yes. Oh, so you're a North Jersey girl, too. Cool, so you're all right. Right on.

CRONIN: My dad used to work in Patterson. He also refers to hot dogs as tube steaks. So we used to, like, hit up all those spots.

VAN JURA: (Laughter). Everything that I'm doing is inspired and based upon places like Hot Grill, the Dog House, Hank's Franks, Rutt's Hut, of course, too.

CRONIN: Rutt's Hut.

VAN JURA: What I - I'm a hot dog guy, you know? Like, it's a thing, I guess. It's a vibe, I guess. I don't know.

(LAUGHTER)

VANEK SMITH: I feel like I could hear you guys talk about hot dogs all day. I feel like you guys were speaking, like, fluent northern New Jersey hot dog. But I did pick up that Chris' hot dogs are all beef. They are grilled, and they are served in, like, the special northern New Jersey way.

CRONIN: Yeah, yeah. Say it like a local. We call it all the way.

VANEK SMITH: A dog all the way - hot dog all the way.

CRONIN: Hot dog all the way.

VAN JURA: We have an all-the-way dog - brown mustard, Texas chili sauce, raw onions.

CRONIN: So Chris took his savings and his stimulus check, and he started Catalyst Hot Dogs late last year at the same time that millions of people across the U.S. were doing the exact same thing.

JULIA POLLAK: Business applications are at an all-time high.

CRONIN: Julia Pollak is an economist with ZipRecruiter. She says COVID created a very unique set of circumstances that made ideal conditions for people like Chris to start a business.

POLLAK: There are two things that made a big difference. One - so many people were laid off on furlough and suddenly had time, but they didn't have time that they needed to use to spend desperately searching for work because they also got an enormous amount of fiscal support. So there are many people who took that stimulus check and decided, wow, you know, I never have $1,000 in my bank account. I'm going to use this to start a business.

VANEK SMITH: Also, Julia says, starting a business now is really fast and really cheap. You can register your business for just a few hundred dollars. And a lot of these companies are really little. It's like a little store on Amazon or on Etsy where someone sells tie-dyed masks or candles. The startup costs for these businesses are super-low, so a stimulus check for $1,000 can make it happen in a way that it couldn't have even 10 years ago.

POLLAK: They're not investing an enormous amount in office space and fancy, you know, kombucha on-tap machines. They're starting off as a lean, you know, freelancer-driven or remote-worker-driven, online-only business. Their only cost is labor.

CRONIN: And that's how it worked for Chris. He bought the cart for about $10,000, puts in his food orders every week. His costs are minimal. He pays for the use of a commissary kitchen for food prep. He pays for propane to drive his cart around, and that's it.

VANEK SMITH: And this kind of business - or something like selling masks on Etsy - that might seem like small economic potatoes, not anything close to a big fancy Silicon Valley startup with a five-year business plan and millions in venture capital. But Julia says don't underestimate these businesses. Little scrappy companies like these have a superpower.

POLLAK: Many people have used their own money, their own stimulus checks, their own savings to start businesses. I think many, many of the new business owners have a lot of skin in the game.

CRONIN: The people who start these companies love these companies. They will fight and sacrifice, and they probably won't walk away if things get hard or they're working 100-hour weeks.

VANEK SMITH: Also, Julia says, companies that start during a difficult economic time have a strange kind of leg up.

POLLAK: They're like cactuses. They're like plants that grow in difficult conditions but that can last forever.

VANEK SMITH: Julia points out that there is a rich history of companies started in economic downturns that went on to become some of the richest, most innovative companies on the planet. Microsoft, Uber, Disney, Revlon, Warby Parker, GE - those were all started during economic downturns.

CRONIN: Julia says these companies have resilience and survival in their DNA.

POLLAK: This is actually a very, very exciting time, and we could see a lot of growth out of the sort of embers of this horrible crisis.

CRONIN: Like Chris Van Jura - his own money is totally tied up in Catalyst Hot Dogs. The hot dog season is in full swing, and business is starting to pick up.

VAN JURA: Somehow, an opportunity was thrust upon me. Forgive me, William Shakespeare. And we're able to do something, you know? I'm trying to make it great. We really are. And we're having a lot of fun, so - I will say (laughter), contrary to the emotions I'm having right now, I'm very happy.

VANEK SMITH: Shakespeare and tube steaks, Brittany.

CRONIN: It's a vibe.

VANEK SMITH: Shakespeare and tube steaks, it is a vibe. It is a vibe all the way.

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CRONIN: This episode of THE INDICATOR was produced by Darian Woods with help from Gilly Moon. It was fact-checked by Michael He. Our editor is Kate Concannon, and THE INDICATOR is a production of NPR.

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