Data shows 2020 record year for new businesses in NC and US

RALEIGH, N.C. (WTVD) -- While 2020 brought the worst national unemployment numbers in nearly a century, it was also a record-breaking year for the creation of new businesses--both in North Carolina and across the country.

New census data analyzed by the ABC11 Data Team shows new businesses have skyrocketed since May 2020.

While many who were able to work from home during the pandemic were grateful to have their jobs when so many others were losing theirs, some people actually quit their jobs to start a small business during the pandemic.

"When there is an opportunity, you know, you have to answer the call. And so I feel confident in my decision," said Torrey Debnam of Raleigh, one of the record number of North Carolinians who started a new business in the midst of the pandemic.

He left his job to start The Pairing Place, a gift basket company that helped other businesses stay afloat by selling their items online.

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One of the first things new businesses do is get an Employer Identification Number or EIN from the IRS.

According to the U.S. Census Bureau, more than 133,000 EINs were issued in North Carolina in 2020: a 29% increase over the prior year and an all-time record.

"It's been a huge spike in the number of new businesses formed over the last year. And it seems to be directly related to COVID," said Gregory Brown, a finance professor at University of North Carolina's Kenan Institute.

Broown and others in the business world know the phenomenon of 2020 as The Great Reset: when bad economic times in America spur entrepreneurial innovation, including the creation of new businesses.

The pandemic's Great Reset didn't just happen in the Old North State.

According to the Census data, more than 4,350,000 EINs were issued nationwide in 2020.

That's a 24% increase over the prior year and another all-time record.

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"To see it now is exciting," said Brown. "It does mean that there is this kind of creative, innovative process happening with small businesses."

Torrey Debnam's The Pairing Place is not only paying him and helping other companies when their products end up in his gift baskets, but also local business The Loading Dock, where he rents co-working space for his new venture.

Debnam's business is also proof that the record number of new businesses could be even larger than the EIN data shows.

Several years ago, Debnam got an EIN when he toyed with starting another business. When he tried to get a new EIN for The Pairing Place, he was told to use his old one.

He believes he's not alone on that front.

"I can assure you that those numbers are skewed a little bit in regards to new business startups," he said.

Brown agreed, but said there's probably still more to the story. He said the bad news is that there is probably still a net loss of businesses due to the pandemic.

But the record number of start-ups gives hope that America's economy could soon be back on track and restore lost jobs.