Although the number of small businesses launched in the past few years continues to be higher than before the pandemic, the number of employees at each company is shrinking.
Reasons for the smaller headcounts vary from slowed hiring due to pandemic-related headwinds and entrepreneurs choosing to keep their operations small out of a desire for a better work-life balance to the rise of remote work, the expansion of the gig economy, and the increase of software tools.
It doesn’t matter the industry or the location of the business, as a Wall Street Journal analysis of government data found that the emergence of the “pint-size startup” is consistent across most industries and geographies and happens in both rural and urban areas.
And while the number of new startups has increased, companies launched during the pandemic were more likely than their predecessors to report they had been operating at a loss, according to surveys by the Federal Reserve Banks.
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