Newcomers from the COVID Migration Don’t Just Bring Themselves: They Build More Microbusinesses

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City Spotlight

Newcomers from the COVID Migration Don’t Just Bring Themselves: They Build More Microbusinesses

In places like Ormond Beach, newcomers have an outsized impact on growth

Michelle Lamb and her late husband, Keith, had spent an idyllic, sun-drenched few years in Cocoa Beach, Florida after he retired from the Navy in 2005. So when COVID hit and she, like millions of other Americans, rethought where she really wanted to be, she immediately thought of the mid-Florida Atlantic coast. 

When a friend offered to let Lamb temporarily rent their condo in Ormond Beach, a charming beach town just north of Daytona Beach, Lamb jumped at the chance. After a month, she’d not only decided to relocate to the town from Brevard, NC, but she had a business idea germinating. During her visit, she’d found that food tours –  group strolls between restaurants, sampling an eclectic mix of cuisines and cultures – was a fun way to get to know nearby communities. Ormond Beach didn’t have any. So in October, 2021, 10 months after arriving, she co-founded Fun Coast Food Tours with an old friend from their Cocoa Beach days. Her co-founder handles the finances, allowing Lamb, a former corporate events planner, to do the “fun part” of creating, promoting and leading the tours. 

“I love making my own schedule and being able to do something I really enjoy,” she says. “I’m very outgoing; and after a three or four-hour tour I’ve made new friends. It’s really rewarding.”

The fact that Volusia County, within the Deltona-Daytona Beach-Ormond Beach metropolitan statistical area, is booming is well known. While much of the country struggled with layoffs, declining growth and general angst about the future, the county’s population grew 2.2% from mid-2020 to mid-2021 on a surge of new residents, according to U.S. Census data. Cranes dot the skylines, and unemployment has plummeted from 14.6% in April,  2020 to just 2.5% in April. The MSA rose from 69 to 39 on Milken Institute’s ranking of Best Performing Cities in the past two years, putting it safely in the think tank’s “high rank and rising” category. 

Entrepreneurial newcomers

What’s less understood is the extent to which entrepreneurs like Lamb contribute to, rather than just benefit from, such prosperity. While of course an influx of people increases economic activity, attracting newcomers gives an extra economic kick because they tend to start more microbusinesses than other groups, says Robert Brown, chief data scientist of Venture Forward, a research initiative started by GoDaddy in 2018 to study the macroeconomic impact of these entities (loosely defined as any business with ten or fewer employees, and an active website). Specifically, says Brown, every 1% increase in the share of a county’s residents who’ve lived there less than a year creates a .32 increase in microbusiness density.

Microbusinesses are good for the entire economy, not just for their founders. Venture Forward and its economic partners have established that every one-point increase in the number of microbusinesses per 100 people in a community lifts median household income by $195 – for all households in the community. Increased microbusiness density also reduces unemployment, as Venture Forward has found that for every new microbusiness, two new jobs are created.

Impact of a microbusiness snapshot

For areas that are attracting a lot of new residents, that .32 percentage point can have a significant impact – and few places are attracting more than Volusia County.  

According to CoreLogic, a real estate research firm, the percentage of residents who’d lived in the county for less than a year was 7.9% in 2021, the ninth highest of any county in the nation. 

But the total increase in population, of around 2%, was dwarfed by a 25% increase in microbusiness density, from 7 per 100 people to 9 per 100 people.

While business registration requests are not a proxy for microbusiness starts ­– approximately 80% of microbusiness founders don’t bother to register at first – the 24% rise in business applications in the county for the year is compelling further evidence.

If that’s not enough, look at how the area fared on the Microbusiness Activity Index, a composite score of several factors created by Venture Forward and UCLA Anderson Forecast. The Daytona metro jumped from a score of 101.77 in March, 2021 to 104.77 a year later.

That increase puts it in the top third of all metros nationwide.

“The in-migration noted by CoreLogic shows that Volusia County is clearly an attractive destination for residents, and the increasing MAI scores is evidence of a strong microbusiness environment,” says Brown. “All county residents are deriving the benefits of a more robust and diverse economy,” says Brown.

Fertile territory for microbusinesses

Volusia County’s success isn’t just due to its beaches and former Floridian’s good memories. For starters, the area has long had a business culture friendly to small businesses. According to Regionomics, “very small businesses” with fewer than 20 employees accounted for 23% of employment in the Deltona-Daytona Beach-Ormond Beach MSA in 2018. That’s a higher percentage than any other MSAs in the country, except for the cross-state Sarasota-Bradenton area.

Also, construction booms and microbusiness booms tend to go together. Volusia county granted 20% more building permits in 2021 than in 2020, creating a great opportunity for skilled workers who might be looking for a job or a city with a cheaper cost of living. “We see a ton of people going into business for themselves as electricians, roofers, plumbers, all the trades,” says Sheila Slick, co-chair of the Volusia/Flagler counties chapter of SCORE, a national mentoring network for entrepreneurs that partners that with the U.S.Small Business Administration. .

Many of these new arrivals are Hispanic immigrants.The decidedly diverse make-up of the newcomers is fueling a particular boom in new restaurants, “especially ethnic ones,” says Antonio Flores, another Score Certified Mentor who operates out of the nearby city of Palm Coast in neighboring Flagler County. “First there were Mexican and Cuban and Puerto Rican places, and now there’s Venezuelan, Colombian – you name it.  Every new nationality that moves in has a unique cuisine to offer, and people just get started from a hole in the wall.”

A helping hand from local leaders

Local policymakers and community leaders are also doing a great job laying out the welcome mat, says Lamb. She says the Ormond Beach government exploited its natural advantage as a smaller organization, by limiting the amount of red-tape involved in getting a business license for a venture like hers. And the city’s economic development department hosts a variety of effective, well attended meet-ups and training programs for aspiring entrepreneurs.

For example, SCORE’s Slick taught a 10-week entrepreneurship course – the Kauffman Foundation’s FastTrac program – that was sponsored and supported by the city.

The course sold out, and about a dozen of the 32 attendees have already started their own business.

In terms of the future, there’s no better positive indicator than other microbusiness owner’s success, says Burt Chojnowski, long-time president of the Fairfield Entrepreneurs Association of Fairfield, Iowa, which developed a rich, self-reinforcing culture of microbusiness creation over the past 40 years. 

“Ninety percent of what entrepreneurs learn, they learn from their peers,” says Chojnowski. While programs providing support and networking opportunities for local entrepreneurs are essential, the biggest win is when the microbusiness bug infects the larger community. “Those focused efforts have helped turn every coffee shop and restaurant in town into economic gardening “hot spots,” he says.

Link to open the "Introducing GoDaddy Open" page

Now, newcomers to Volusia County are feeling the same sense of support. “Small businesses here really support each other,” says Lamb, who with her partner now offers three different tour options, is a member of the Chamber of Commerce and has plans to expand to more cities in time. “We’re still learning, but we find our way by comparing notes with other people who are in positions like mine. They help me if they can, and I help them.”