Startups are way up in Tennessee, nationally as pandemic prompts people to redefine success

Staff Photo by Robin Rudd / Montrell Besley bought a video game trailer in May and has a business taking it to events, in addition to his day job at Chattanooga Prep. Besley posed for a portrait with his trailer.

Despite the COVID-19 pandemic - or perhaps because of it - business starts jumped to a record high in the first half of 2021, according to filings with the Tennessee Secretary of State's Office.

"People who have been displaced are thinking that if they were ever going to do this, maybe now is the time," said Lynn Chesnutt, managing director of the Tennessee Small Business Development Center in Chattanooga. "If there is any silver lining in what we've been through, we are seeing much more intentionality in what people are doing, and they are willing to do more to be successful."

Montrell Besley has always had an entrepreneurial streak, and he started mobile arcade Rolling Video Games in May, when it looked as if the pandemic would soon relent.

"I dove right in, head first, because I knew the market was going to go crazy because people had been stuck in the house for an entire year," he said.

A crisis like the pandemic tends to spur action in people who may have been considering entrepreneurship, Besley said.

"I saw a very big surge in people starting businesses," he said. "Think about all those people that lost their jobs and didn't have an avenue to take. Some people didn't get unemployment - they had to create something."

In Tennessee, a report from Secretary of State Tre Hargett's office shows 70,118 businesses filed for business licenses over the past year, and 19,983 filed in the second quarter of 2021, the highest quarterly total ever recorded.

New business filings in Tennessee in the second quarter of 2021 grew 61.6% from second-quarter filings in 2020. This is the second quarter in a row that Tennessee broke the previous record of year-over-year gain in the 28-year history of the data being collected.

Nationally, Americans filed paperwork to start 4.3 million businesses last year, according to data from the Census Bureau, a 24% increase from the year before and by far the most in the decade and a half the government has kept track. Applications are on pace to be even higher this year.

The surge is a striking and unexpected turnaround after a 40-year decline in U.S. entrepreneurship. In 1980, 12% of employers were new businesses; by 2018, the most recent year for which data is available, that share had fallen to 8%.

Economic upheaval created both challenges and opportunities for business, said Bill Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee.

photo Photo contributed by Gloria DuBose / Gloria DuBose worked for a local nonprofit organization for nine years before shifting to work in a vegan restaurant and starting her Crossing Borders meal prep business this summer. Here she samples a veggie burger she prepared.

"As companies shut down, it created a need for people to find other ways to support themselves, and it created new opportunities for business to get done in a different way," he said.

The COVID-19 virus upended many businesses and careers, cutting nearly 575,000 jobs across Tennessee during the worst of the economic downturn in the spring of 2020. By July 2021, employment had returned to pre-pandemic levels, and many industries were facing a labor shortage.

Besley still has his job as director of community engagement for Chattanooga Prep, a local charter school for boys, but he always encourages people to invest in themselves and their own ideas and passions, he said.

"It runs deep in my roots in my family," he said. "We all have other businesses outside work. At the drop of a dime, your job can tell you, 'We don't need you anymore.'"

The resurgent virus has slowed his business some, but not halted it, he said.

"I still get calls, and I still push safety when I'm doing my events," he said.

He also sought expert help in setting up the business, working with Launch Chattanooga to build a business plan, Besley added.

"The pandemic helped push me to do my own thing. It helped me lock in and build my business plan. It forced me to put some things down that were holding me back," he said.

Hal Bowling, co-founder and executive director of small business booster Launch Chattanooga, said the pandemic drove demand for the nonprofit organization's services.

"We continue to experience high demand for training and support and are up more than 50% from pre-pandemic years in terms of the number of entrepreneurs we are working with," Bowling said. "I believe the pandemic is bringing more people out to start a business during a time when things are very uncertain and entrepreneurs are coming up with solutions to address new community needs."

Gloria DuBose worked for nine years at the nonprofit Bethlehem Center in Alton Park before she switched gears this summer to focus on her love of preparing healthy, creative food from a wide variety of cultures.

"I'd been thinking about it for a while, but I think the pandemic really made me evaluate what my priorities were and what allowed me to thrive," she said. "My faith is pretty important to me. I felt like God was putting pieces together."

DuBose went to work in the kitchen of local vegan eatery Southern Squeeze and launched her Crossing Borders meal prep business in May. She's working now with friends and family as she builds a business plan and gets certifications in nutrition, DuBose said.

"I was at the Bethlehem Center for years, and it was so great, but toward the end I thought it was time to transition to do something else," she said. "I felt like I had some gifts and experiences I wasn't getting to use."

For Besley, one benefit of working with young men and being an entrepreneur is sharing the message with them, he said.

"I just want to push people to have their own - go out and have your own," Besley said. "Figure out what you love to do, how you're going to do it, when you want to do it, and get out there and do it."

Contact Dave Flessner at or 423-757-6340.

Contact Mary Fortune at Follow her on Twitter at @maryfortune.