More than 1.5 million new businesses formed nationwide during the third quarter of 2020, according to the U.S. Census Bureau, an increase of more than 77 percent from the second calendar quarter and the biggest jump in more than 15 years.
“There’s a consensus that a true resurgence in business formation is occurring. There’s something real going on. As an economist, I’d say that turmoil always creates opportunities for entrepreneurs” stated Timothy Sullivan, Ph.D., instructor in the Department of Economics and Finance at SIUE and director of the Office of Regional Economic Analysis.
Wayne Barber Jr., founding co-principal at Southern Illinois commercial real estate firm BARBERMURPHY, has worked in the real estate business since 1988. He has brokered deals through four U.S. economic recessions – those in 1990- 91, 2001, 2007-09 and 2020. Barber says the new business formation statistics in Q3 2020 include what are known as “high propensity businesses,” meaning those that incorporate, lease space and have payroll. “We’re seeing it in the prospects who are asking to see potential leasing opportunities,” said Barber. “These (Census) numbers are an encouraging sign that entrepreneurs and existing businesses – here in Southern Illinois and elsewhere – are launching and growing despite one of the toughest times in history. It’s a good sign for where the economy may be headed in terms of a recovery.”
Mike Pierceall, Barber’s colleague and a BARBERMURPHY broker associate, says he’s regularly urging property owners to be creative and flexible in their leasing terms these days, particularly if the prospect is a start-up with a solid business plan and financial capacity. “A property owner who is willing to consider a three-year lease with allowances for a certain amount of tenant improvements that would be deducted from the rent is one option,” Pierceall said.
Article written by Kerry Smith, Informationworks; Published by The Illinois Business Journal