TRAVERSE CITY — It’s hard to start a new business when you can’t open your doors.
It’s difficult for an entrepreneur to make decisions with assuredness in a world of uncertainty.
The number of assumed name filings (also known as a DBA, or “doing business as” registration) with the Grand Traverse County Clerk’s office in 2020 decreased 33.4 percent from the previous year as the COVID-19 pandemic settled over the region in general and the country as a whole.
“It was really clear how there was this incredible amount lack of certainty,” Traverse Connect President and CEO Warren Call said. “That’s what businesses need. For entrepreneurs, it’s incredibly risky (to start a business) in such an uncertain situation.
“This was probably our most uncertain economic time since the (Great) Depression.”
“We all know we can’t detach COVID from the economy,” Networks Northwest CEO Matt McCauley added. “They are directly linked to one another.”
A late flurry of new assumed-name business applications in the last few days of 2019 pushed the total to 604, a bump of 4 DBAs from 2018. Just 402 new DBAs — which are good for a term of 5 years — were recorded in 2020.
New business filings began 2020 with a jolt as the 57 DBAs in January and 53 in February were each an increase of five from the same time period in 2019. Registrations in March of last year totaled 39, down 17 from March 2019.
April of 2020 was the bottom. Just 17 new DBAs were recorded.
“I’m not surprised since that was when the pandemic shut everything down,” Grand Traverse County Clerk Bonnie Scheele said. “It’s hard to take out a DBA when you can’t open the doors anyway.”
“That’s not surprising,” Call said. “I’m thankful it’s not down even more. Going into March and April, we were standing on the edge of the cliff and we didn’t know what would happen. We planned for the worst and were thankful when it didn’t happen. But obviously it was a real bad year.”
April’s dearth continued in the fifth and six months of 2020. May saw 27 filings (down from 65), and in June there were 29 (down from 38).
The final six months of 2020 were all down from the same time in 2019, with the biggest decreases in July and August.
Scheele noted the $10 filing fee has remained unchanged for more than 30 years.
Some of the DBA decline could be due to restricted access to the Governmental Center, especially since new DBAs need to be notarized. Scheele said her entire staff are notary publics.
According to Administrative Assistant Lisa Emery, the Governmental Center was closed to the public from March 17 through June 12, but open for normal business by phone or online.
The building was open June 15 through Nov. 13 by appointment.
From Nov. 16 through Jan. 15, 2021, the Governmental Center again was closed except by appointment. Online and phone business still is continuing.
While the number of DBAs registered through the county clerk’s office declined, Scheele said she thinks corporations and limited liability company filings through the state probably increased. Although a more expensive alternative to a DBA, Scheele said, LLC filings come with more protections.
As the calendar turned to 2021, officials are looking for a rebound of new business.
“Whenever we see a significant decrease, there does tend to be a soft economic revolution,” McCauley said. “New markets are identified, new processes are implemented and new businesses are created.”
“We’re beginning to see some optimism,” Call added. “People are planning for what the spring looks like.”
Call said the regional pandemic economy showed northern Michigan is “in a pretty good spot for what’s going to happen” on the other side of the pandemic. He said the lockdown showed that not only is remote work and learning possible in the area, but also mobile entrepreneurship — starting and running a business remotely — is possible.
“I see the pandemic as a pause in our otherwise good momentum,” Call said.
“The pandemic has created a lot of different scenarios,” Scheele said. “We’ll see what happens in 2021 when things get back to normal.”
If there is a “normal” on the economic horizon, when does it occur in northern Michigan?
McCauley cautioned that certain industries still are affected by state restrictions.
Restaurants may be the most obvious, but also fitness centers and theaters are still significantly slowed. McCauley said there’s no “light switch moment” on the immediate horizon.
Increases in vaccination rates and a decline in coronavirus cases and deaths should help ease some businesses back into more normal operations and spur the formation of others.
“We want to see a relaxation of the policies negatively affecting business activities,” McCauley said.
But a loosening of restrictions may be felt later, rather than sooner, in the new year.
“When you look at 2021, I don’t see a lot of change between the second half of 2020 and the first half of 2021, unfortunately,” McCauley said.
Call envisions more businesses using the first quarter of 2021 to plan for new endeavors, and actual expansion of existing processes in the second quarter of the new year.
“I think its going to take some time,” Call said. “We’re still fairly unsteady. It’s a huge risk to start something new right now.”
The number of new DBA filings in Grand Traverse County wavered between 680 and 802 each year from 2013 to 2018.
While numbers may not reach into the 700s, Scheele does expect 2021 to look more like 2019 or 2018 than 2020.
“I think it will be pretty close to what it was in previous years,” she said. “It’s stayed pretty steady over the years. Like anything, things go up and down with the economy.”