Tue. Dec 7th, 2021

While the 2010s may have been one of the least entrepreneurial periods in American history, with booming venture capital and a host of new founders, no one can deny that startups have a big role to play in post-pandemic DC.

But an unsung hero on stage, a new study shows Venture Forward by domain host Come on, Dad, is the area’s growth in micro-enterprises. The smaller sibling to a startup, a micro-enterprise, as defined in this study, is a company with less than 10 employees and an active website. The majority, about 57%, are established by solo founders, and about two-thirds see the company as their primary or supplementary source of income.

With this definition, micro-enterprises often tend to rely on the Internet for things like sales Instagram or use a website to book hair and nail appointments. Thus the Internet, Venture Forward Senior Director Alexandra Rosen said is a crucial part of the success of these companies.

“While it’s important to have access to the Internet, it’s how you use it that’s even more important,” Rosen said, noting that once founders access broadband, they need marketing help to truly become a success.

Here are some of the key findings of the survey, nationally:

  • 17% of all micro-enterprises have started within the last 16 months
  • Black-owned enterprises accounted for 26% of this number, and women-owned enterprises accounted for 57%, which is actually an increase from pre-pandemic.
  • 24% of micro-enterprises are owned by those who would otherwise be classified as outside the labor force (homemakers, students or those who were made redundant).
  • 64% of respondents in the survey started their business with an initial investment of less than $ 5,000, higher than the 48% who said the same in 2020.

At home, micro-enterprises in DC are actually richer than the national average, which counts about 15,600 in the district. That’s a 148% increase from pre-pandemic, which means that when they have extra time, Washingtonians seem to start small businesses.

According to Venture Forward, this boom is in the area’s favor. The micro-enterprises that require such small costs to get started rose so much in 2020, when the founders used public funding as stimulus checks to launch. With this extra access, bypassing systematic prejudices in lending that BIPOC founders often experience, micro-business founders brought more revenue into their communities with their businesses.

“When you look over a number of years, if you add one to a community, the median income of the household increases,” Rosen said.

They also help with employment, Rosen said despite their small size. She said that for every micro-enterprise added, at least two jobs will be added per year. entrepreneur. In areas that had increased broadband access (a must that many communities still lack), unemployment would fall across the board.

According to Rosen, micro-enterprises can already be called Baltimore’s hidden talent, and it’s not unlikely that they can have the same influence in DC.

“They’re small, but what they do is that they are the long tail that really stands out in terms of their contribution to the local economic performance and ecosystem,” Rosen said.

Washington, DC microbusiness data from Venture Forward. (With courtesy picture)

Despite their strong growth over the last 18 months, micro-enterprises still need help to really continue this trend and flourish to all that they can be. Rosen said respondents in the survey noted a need for marketing support and mentorship in companies. Black and female entrepreneurs, she noted, are also seeking increased knowledge about or access to public programs in their area.

“What they’re really saying they need capital for is help managing their website,” Rosen said. “The challenges we want to see here are marketing across the board. And then the places where [respondents] say capital, we ask them, what would you use that capital for? And it comes back to marketing. ”

While micro-enterprises usually remain at this size below 10 employees, it is likely that this boom could help the district’s startup community in general. Rosen noted that there is representation in micro-enterprises from both part-time founders and those who make it a full-time career, which means there is a wide range of avid founders.

Like start-up ecosystems as this thriving volume of micro-enterprises ages, there is potential for founders to move into another enterprise as well. About 17% were started within the last year and a half, but Rosen noted that the figure indicates that eight out of 10 companies were started before 2020, which means that founders create successful companies with several years. Knowing that the average entrepreneur has more than one business, Rosen said that as these founders gain momentum, it is very likely that they will start a second or even third business going forward.

While they may not be the ones creating drastic changes in the industries, micro-enterprises certainly should not be ignored in the future, Rosen noted.

“Not everyone wants to disrupt an industry, but these people are really passionate about what they do and they can work at it full time, make money,” Rosen said. “Then they just need a little help with a little capital and some marketing.”

Read the full report -30-

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