PROVIDENCE, R.I. (WPRI) – Lauren Ezovski spent two decades working at her last job before she was let go in October, joining the thousands of Rhode Islanders who have lost work during 2020.
The coronavirus pandemic has shuttered businesses and fueled unemployment, which spiked to 18.1% in April before steadily declining as the state’s economy started to recover. By November, the unemployment rate had improved to 7.3%, but it’s still more than double what was seen in the months before the pandemic hit.
Ezovski decided against trying to find a new employer, and instead joined an unprecedented number of Rhode Islanders who started a new business in 2020. Last week she launched a website for her online marketplace, Parts Unlimited Direct, where she sells miscellaneous equipment at a discounted rate.
“I decided to go full steam ahead on opening the website,” Ezovski told 12 News, adding that she had been doing it as a side gig while working at her previous job.
As of Wednesday, 10,124 new businesses had been registered with the R.I. Secretary of State’s Office during 2020, marking a new record and the first time the state has seen more than 10,000 in a single year.
Secretary of State Nellie Gorbea, whose office oversees all new business filings, said the trend is good news and not necessarily what people would expect during a time of so much economic uncertainty. But her team has identified emerging patterns in the mix of new business, which helps explain some of the growth.
“Clearly, some business owners have identified a gap in the market and they’re figuring out they can fill it,” Gorbea told 12 News. “We’ve seen some increase in daycares, cleaning companies and there are also business owners who recently lost a job because of the contraction in some companies and have decided to become self-employed.”
Another popular filing: real estate holding companies, suggesting investors have formed entities to buy rental properties or second homes. In other cases, like Ezovski’s, people have been laid off and are simply looking to pursue a business idea that they’ve been considering for years, Gorbea added.
“They want to pursue the entrepreneurial dream,” she said.
Of course, starting a business is far easier than running one, said University of Rhode Island distinguished professor of business administration Edward Mazze, who has spent decades studying the Rhode Island business community. Even more challenging, he added, is running a successful startup.
“Many of those businesses may be nothing more than a front to keep someone busy,” Mazze said, when asked about the unprecedented level of new registrations. “The real test is how many of them are going to be around a year from now.”
In addition to teaching at URI, Mazze is a board member at Urban Ventures, a microbusiness incubator for startups with fewer than 50 people. The organization has been busy fielding calls from people of all backgrounds who are interested in starting business during the pandemic, mostly from their homes, Mazze said.
The idea of entrepreneurship is popular – in part because of the attention it gets from news outlets – but also because there are many people over the age of 50 who are finding themselves out of work and are interested in going out on their own, he added.
“The cheapest way to go into business is going to Staples and getting a business card called, ‘Consultant,’” Mazze quipped. “It doesn’t surprise me that there are a lot of people out there that are testing the waters.”
During the financial crisis of 2008 and the subsequent Great Recession, new business filings fell in Rhode Island, as fewer people felt emboldened to go out on their own. Gorbea attributed the difference this year in part to the state’s ongoing effort to make it easier for startups to navigate the bureaucracy of launching a new business, meaning people who are excited about an idea don’t get discouraged by red tape.
“We have a lot of stuff online that we didn’t have before that makes it easier for people,” she said, noting the various informational resources and interactive platforms that are offered for free at the state’s website.
But Mazze warned against drawing too many comparisons between the Great Recession and the pandemic-fueled economic downturn, saying the government-mandated shutdowns of 2020 have pushed more people into their homes and expedited a shift in consumer behavior.
“That was a different type of event,” Mazze said about the Great Recession. “When we had the financial crisis, you weren’t discouraged from going out to eat, movie theaters weren’t closed, gyms weren’t closed. People hurt, but this is a different type of hurt. This pandemic is going to create a whole new way of working and a whole new generation of business models.”
Ezovski is among those who have found a whole new way of working. She’s currently doing what many entrepreneurs must do at the beginning, serving as the company’s manager, buyer, salesperson, marketing officer and even delivery person at times. Despite the workload, she’s bullish about where the venture is heading and she’s enjoying the new challenge.
“It’s a whole new world for me,” she said. “And I am loving it.”