New business registrations in Kanawha County are off to a roaring start in 2023.
According to data from the West Virginia Secretary of State’s Office, 290 new businesses registered in the county during the first two months of the year, a 2.43% growth rate that marks a 21-year high during the same time period.
In terms of recent history, the number was up significantly from the 205 new businesses registered in the county during the same time period in 2022 (1.81%) and 221 in 2021 (2.06%). The number of new businesses over that period also eclipses the 219 registrations recorded in 2019, prior to the COVID-19 pandemic.
According to the Bureau of Labor Statistic, 20% of new businesses fail during their first two years of operation, while 45% fail during the first five years. So while new registration numbers aren’t necessarily a barometer of a business’s future success or longevity, they do illustrate a local business environment that is ripe for growth.
“We run a small business incubator and we’ve also noticed a huge uptick since the first of the year,” said Drew Dunlap, Charleston Area Alliance Director of Economic Development. “I think it’s just pent-up demand. I think there’s things that would have happened during COVID, and now people feel confident and they’re making moves.”
Dunlap said while prospective business owners typically come to him with fledgling ideas, the latest crop has been somewhat different.
“The people I’m seeing have been considering these plans for a long time,” Dunlap said. “They’ve really worked over their business plan.”
Of the new businesses registered in Kanawha County, 151 are based in Charleston. That’s more than what was seen during the same time in 2022 (113) and 2021 (109).
St. Albans saw 25 new business registrations, followed by South Charleston with 16, Dunbar 14, Cross Lanes 13, Nitro 11, Elkview 11, Belle 5, Tornado 3 and Sissonville 2.
According to Economic Innovation Group, as cited by Forbes, the local numbers jibe with an elevated baseline of new business creation nationally, generated by a sharp shift to entrepreneurship during the early period of the COVID-19. That growth has moderated, but sustained in the years since.
According to the 2022 Business Openings Report from Yelp, based on its data, new business openings “reached an all-time high” in 2022, “largely driven by new home and local services businesses.” West Virginia featured the seventh-highest new business growth rate from 2019 to 2022 by their metric, behind Mississippi, Alabama, Georgia, South Carolina, Louisiana and Tennessee.
The more than two-decade high for new Kanawha County registrations to start the year also comes on the heels of a 2022 when the Federal Reserve raised interest rates on four separate occasions to help curb inflation.
On the labor side of things, according to the Bureau of Labor Statistics, the non-seasonally adjusted unemployment rate for Kanawha County in January was 3.9%, which marked a low for the month not seen in more than 30 years of available, comparable data covering the same time.
It also put Kanawha County’s rate just under the non-seasonally adjusted state rate of 4.2%, and even with the comparable national rate for the month.
The Kanawha County figure corresponded with a continuously declining county labor force number — 77,940 in January 2023 — which also hit its lowest mark in more than 30 years of available data. The labor force number represents those working, and those eligible and actively seeking employment.