Signature Associates

Michigan customers had lots of options to support a new, small business in 2021. They could get a “Millennial Lunchable” in Saginaw, an “all-beef dirty water plain dog” in Kalamazoo or BYOC — bring your own container — and fill up on cosmetics in Ann Arbor.

Despite a labor shortage and a wave of resignations defining the first year after coronavirus arrived in the state, Michigan saw a spike in small business job growth.

The first three quarters of 2021 saw the fastest start to small business job growth in 23 years, according to the Michigan Bureau of Labor Market Information.

Small businesses, with fewer than 50 employees, created almost 170,000 jobs last year.

“Small businesses form the backbone of Michigan’s economy and are the anchors of communities across the state,” said Governor Gretchen Whitmer, in a statement. “Through tough times, they’ve shown grit and innovation to continue getting things done for their customers and employees.”

Almost all of the state’s businesses, accounting for 99.6%, are defined as small businesses and staff fewer than 500 employees. Michigan is home to 902,000 small businesses, which represent nearly half of the state’s workforce at 48.3%.

This entrepreneurial spirit has been on the rise since the start of the pandemic and continued into 2021. New ventures in 2021 saw a 59% increase compared to 2019, as 150,000 new small business applications were filed.

This new business boom is a much-needed rebound, not only from the pandemic but from the 2008 recession as well. In January 2020, the Consumer Financial Protection Bureau reported Michigan small business lending had been stuck at about half its 2004 level for over a decade.

Census data shows new business formation in Michigan hovered between 6,000 to 8,000 applications a month from 2004 through 2019. After the pandemic hit, that number surged to 20,000 and has averaged around 13,500 a month throughout 2021.

“While the numbers are encouraging, we must build on this momentum by making investments to retain and recruit more workers, expand operations, and attract additional investment,” Whitmer said.

The governor is pushing for small business growth in her $2.1 billion proposal. Whitmer’s MI New Economy plan aims to make Michigan a top ten state for small business job and revenue growth, household income growth and venture capital funding. The plan includes small business tax cuts, restart grants and millions of proposed investments into startups on both Main Street and in the tech industry.