A new study from the S.C. Small Business Chamber of Commerce shows new business licenses for Horry County are down 31 percent from April to July of this year compared to the same time last year.
The state is equally down 31 percent during the same period.
The S.C. Small Business Chamber of Commerce President and CEO Frank Knapp Jr. told The Post and Courier that more financial help is needed on the federal level to help rebound from this crisis.
In Horry County, from April 2019 to July 2019, there were 1,003 new business licenses, according to the study. In 2020 between the same months, there were 692 — a difference of 311 and the second-largest decline among South Carolina’s largest counties behind Richland.
Locally, Karen Riordan, president and CEO of the Myrtle Beach Area Chamber of Commerce, said the COVID-19 pandemic has naturally impacted new and existing businesses this year.
“Recent research from SCORE (formerly the Service Corps of Retired Executives) shows the majority of entrepreneurs are taking a ‘wait-and-see’ approach to launching new businesses during the pandemic,” Riordan said. “While this is not unexpected, our community is continuing to develop and improve infrastructure, such as the Arts and Innovation District in Myrtle Beach, to prepare for those businesses looking to launch or expand in our area.”
The Arts and Innovation District is part of the city’s Master Plan approved in March 2019. It aims to revitalize four areas: Kings Highway, Oceanfront, Main Street and an Arts District, the latter including Main Street, Broadway Street, Oak Street and Ninth Avenue North. Buildings along Ninth Avenue North may be the first to redevelop, with plans already underway for a co-work and events space, according to the city’s website.
The small business chamber’s study showed new business licenses declined in counties and cities surveyed throughout the state by 946 from April to July in 2020 as compared to 2019.
“If these results reflect similar experience in other states, the implication for economic recovery from the recession is severe,” the study states.
The lack of startups means a lower expectation for new jobs, because many new jobs come from businesses less than 5 years old, said Knapp, the small business chamber president.
“While there are anecdotal stories of individuals starting businesses out of necessity most of the time, we’re still way off in new business licenses,” Knapp said. “There’s a 31 percent decrease (statewide) in new business licenses from March through July, comparing 2019 to 2020. That is a significant decrease, and if that is the case in most jurisdictions across the state and across the country, which it might be, we have a big economic problem. We need small businesses. We’re already at a four-decade low with new business startups in this country. The coronavirus has set us back even more.”
Knapp said it was small business who started immediately hiring after the Great Recession.
“It was small business that brought us out with the new jobs that we needed to get the economy back on track…,” he said. “So what we’re seeing is very scary that small businesses are not getting business licenses at the same rate that they were in 2019 and we don’t know when this pandemic is going to be over.”
ADP is a private company that uses “integrated technology platforms, data analytics and strategic guidance in all aspects of human capital management,” according to its website. It also provides economic forecasts and breaks it down employment figures by industry and size.
According to ADP, the small business sector has lost more than 5 million jobs nationwide since January. And Knapp said unless cities stepped up to create adequate funding for its residents to start a business, that number will take longer to rebound.
“Hats off to all the municipalities, all the counties across South Carolina that did, in fact, put in place some type of grants for small businesses. They stepped up and they did that,” Knapp said. “The question now is: Do they have any money to do it again? Remember they were all using that CARES Act money. Well, that may be gone right now.”
At the end of September, the state of South Carolina passed a bill that would create grants for small businesses with less than 50 employees, those who did not get Paycheck Protection Program money, and a special emphasis on minority-owned small businesses. The state’s Department of Administration was tasked with administering the grants. The applications are due Nov. 1.
The department’s website did not appear to have the application available on Oct. 2.
“They don’t have the process up and running,” Knapp said. “There’s $40 million here. They’re working with a national firm that’s going to put it online and build a website, but where is it? Where are the instructions? How can you and I get the information out when they’re not talking?”
Riordan said the chamber works closely with local and state officials, including the Myrtle Beach Regional Economic Development Corporation, or MBREDC, and the North Eastern Strategic Alliance (NESA).
“We work with area municipalities, organizations such as MBREDC and NESA, and state and federal officials to create a business-friendly environment for both existing businesses and new companies,” Riordan said.
Some of the chamber’s recent projects include working with the area’s legislative delegation to secure $65 million from the state for small business, minority and nonprofit grants, where the funding was secured in late September by the General Assembly, and they help area businesses take advantage of these opportunities.
“We also supported legislation at the state level to help modernize the state’s business license process,” Riordan said. “The stability of that fund is critical to prevent any unemployment tax increases paid by area businesses for the foreseeable future and to ensure that laid off employees receive the support they need during these challenging times.”
Sandy Davis, president of the MBREDC, said she and her staff have taken advantage of the slower time during the pandemic and worked to follow up with businesses who have shown interest in moving to the region.
“We continue to send information, but visits to our area have definitely slowed,” Davis said. “We are sending more virtual videos and FaceTiming with our projects. I haven’t noticed a slow down with interested companies. It did slow in April, but I’d say it is back to normal.”
Knapp said South Carolina entrepreneurs and those across the nation need another vehicle to get money.
“The next administration and the next Congress have got to wake up and realize that this country is in a crisis regarding small business startups and put together a plan that is not the same old, same old to help the business startups,” Knapp said. “People have to feel that they’re secure enough to get a loan, and they have a business plan and they go out and do it. We just can’t rely on necessity of having lost a job to be the full driving force of creating new business.”