Has The Covid-19 Had An Impact On Business Start-ups In 2021?

INSEE published its annual report on business start-ups in France on February 3, 2021. It concerns the year 2020, a year marked by the appearance of an unprecedented crisis due to the COVID-19 pandemic. And… Surprise, the statistical institute notes that the number of business start-ups has increased by 4% compared to 2019. Specific sectors have been promising and have enormously contributed to this increase.

Here are the main findings of the INSEE report on business start-ups in 2021.

The number of Business Start-ups increased in 2021 despite the crisis

In terms of business creation, the year 2020 bears witness to a new record. All legal statuses combined (companies, sole proprietorships and micro-enterprises) but excluding agricultural activities, 848,200 businesses were created in 2020, against around 815,300 in 2019. 32,900 additional businesses were therefore created during the year.

The boom in micro-enterprises alone justifies this increase. Indeed, 45,900 other creations of micro-enterprises took place in 2020, in comparison with 2019. The micro-enterprise consolidates its position as the preferred status of French business creators: it represented nearly 2 out of 3 creations in 2020.

For the rest, the creations of individual businesses show an apparent decline: 82,000 in 2020, i.e., 13,000 compared to 2019. Companies are maintained at a level equivalent to that of 2019 (218,000 creations). The simplified joint-stock company – SAS – and its one-person version – the SASU – now represent 2 out of 3 company creations.

A drop in the number of creations during confinement, followed by a catch-up

In its report, INSEE states that business creations suffered a seasonal effect in 2020. It is due to Covid-19 and justified by the various measures that have been taken to curb the spread of the epidemic.

Thus, the number of business creations collapsed during the first confinement, from mid-March to mid-May 2020. However, a catching-up took place throughout the summer. And the pace of business creation, relatively high, was maintained until the end of the year.

Trade, Real Estate and Transport Drive the market up

The sector that contributes the most to the increase in business start-ups is transport and warehousing (+18,000 creations). It mainly includes home delivery, the activity of which has grown significantly following successive confinements/deconfinement.

Logically, the distance selling activity has also made it possible to keep up with the pace of business creation. It generated 11,000 additional results compared to 2019. Finally, real estate has contributed to the building (+3,300 designs, particularly from real estate agencies).

Unsurprisingly, given the context of the health crisis, the number of business start-ups is decreasing significantly in the field of education (sports and leisure activities), coaching, household services (hairdressing, beauty treatments).

It should be noted that most of the creators from the sectors of activity presented above have chosen the status of micro-entrepreneur.

Other lessons from the INSEE report on creations in 2021

Among the other lessons that can be drawn from the INSEE report, we learn in particular that:

• The number of creations is increasing in all regions of France (mainly in Île-de-France),
• The average age of business leaders is around 36 (individual business including micro-business),
• Slightly less than 4 out of 10 business leaders are women (sole proprietorship),
• 7% of newly created enterprises employ at least 1 employee from their launch (excluding micro-businesses)