Thousands of Michigan businesses opened during the pandemic. The boom is still strong.

Chris Welch invented his business when COVID-19 hit Michigan.

An airline pilot who didn’t fly for nine months, Welch used long days and his entrepreneurial spirit to launch Aviator Cookie Co. in March 2021.

“I always wanted to sell cookies at a farmers market and there was never time,” he said. “All of a sudden, I now had an unlimited amount of time.”

While the past two years have been difficult for business owners adjusting to health restrictions, supply chain constraints and labor shortages, the pandemic has also sparked a boom in new businesses. Welch, who now divides his time between flying planes and running the busy Midland cookie shop, is one of nearly 280,000 Michigan businesses that have been formed since March 2020.

“I didn’t want to just sit around and wait to get fired. I wanted to make something productive out of this pandemic,” Welch said.

Related: Midland’s Aviator Cookie Co. Launches New Online Ordering and Nationwide Shipping Services

At the peak in Michigan, more than 20,000 business applications were filed in July 2020, about 164% more than July 2019. Current data from the US Census Bureau % compared to two years ago.

“It’s not terribly unusual for people to turn to entrepreneurship during uncertain economic times,” said Brian Calley, president of the Michigan Small Business Association. “The conventional wisdom around that is that the relative risk of starting a business goes down because the overall risk everyone faces in an uncertain economy is higher.”

Although this is being demonstrated in Michigan, the last great economic crisis had a different result.

Crippled by the Great Recession, Michigan’s small businesses never fully recovered after 2008. In January 2020, the Consumer Financial Protection Bureau reported that Michigan’s small business lending had stalled at about half its 2004 level for more than a decade.

Census data shows that new business formation in Michigan hovered between 6,000 and 8,000 applications per month from 2004 to 2019. After the pandemic hit, it increased to 20,000 and averaged around 13,500 per month during 2021.

Calley says this pandemic-era wave of new business that has been going on for two years is multifaceted.

Many are being started by those who have always wanted to own a business, he said. People facing unemployment and receiving a financial boost from federal stimulus checks made the leap, the National Bureau of Economic Research found.

For Shaun Manning and Truly Render, they found that the pandemic changed their perspective on what they wanted from their professional lives. The Ann Arbor couple, who fanned dreams of opening a bookstore, quit their college jobs and opened Booksweet in August 2021.

“We were wondering if it makes sense to do this now with all the challenges and the uncertainty and everything that the pandemic has created,” Manning said. “I think also, as I heard from a lot of people, it clarified what we wanted from our life and from our experience.”

Related: Opening of a new independent bookstore in a familiar Ann Arbor location

Rootless Coffee owners Sean Murray and Jono Diener looked at how the pandemic changed customer behavior as people turned to shopping online. Murray said they saw the “writing on the wall” and launched the Flint e-commerce based coffee company in September 2020.

“The pandemic definitely formed the foundation for Rootless and what we were actually trying to accomplish,” said Murray.

Passion projects are part of the picture behind growth, Calley said, including people who launched sidelines after switching to full-time remote work. But it goes beyond that.

“While that was a factor early in the pandemic, I don’t think it comes close to telling the full story of what’s going on here,” he said.

Calley believes that a large part of the rise of Michigan’s small businesses can be attributed to independent contractors leaving the workforce and beginning to offer services to businesses struggling to hire new employees in a tight job market.

“As independent contractors, they can work on their own and do it in a way that they are in control of their schedule and workflow,” Calley said.

In Michigan, about 30% of these pandemic-born businesses are “high propensity,” meaning they will likely employ people.

Related: Coffee enthusiasts hope he’ll “break free from boredom” with a new business in Flint

Michigan’s new businesses were a “bright spot” during the dark days of the pandemic, Calley said. But entrepreneurs still face the pressures and challenges of launching a business during an economic downturn.

Murray and Diener have crossed their fingers and taken the blows over the past 18 months: inflation, soaring green coffee prices and the recent uncertainty fueled by the Russian invasion of Ukraine.

“It’s definitely set us up that this world is wild right now,” Murray said. “But I feel like from birth we were well equipped to make quick adjustments, see what was going on and then accept it and fix it.”

Rootless Coffee owners Aviator Cookie Co. and Booksweet credited the community’s support for the success they’ve seen so far. For Welch, known around town as the “cookie boy,” he said sales are 70% higher than he expected as the company nears its one-year anniversary.

Calley hopes the businesses forged during the pandemic will have strong staying power.

“Having more small businesses provides some resilience to the economy,” he said. “It creates a diversity in the economic base that makes us stronger in the face of economic challenges.”

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