New Business Activity on the Eastern Shore

Jan Plotczyk • August 22, 2023

How lively are the commercial areas in your town? Have they been on the upswing since the pandemic, or are there stretches of vacant storefronts along the main street? Are suburban strip malls thriving or empty?

Counting the number of new business applications submitted is one way of assessing the perceived economic health of an area. If entrepreneurs think a town or county will support their business idea, they are more likely to see it as an opportunity.

How many opportunities were perceived in 2022?

According to the U.S. Census Bureau, just over five million new business applications were filed in 2022 nationally. This was a decrease from 2021, when 5.4 million applications were filed.

How did we do on the Eastern Shore?

In the past five years, there has mostly been an annual increase in the number of applications in every Eastern Shore county, until 2022. This includes the pandemic years.

In 2022, the Eastern Shore counties combined saw 5,235 new business applications filed. Mirroring what happened nationally, this was an overall decrease from 2021, when there were 5,486 applications. Caroline, Queen Anne’s, and Somerset counties saw small increases in 2022, unlike the other six counties.

It’s not only the number of applications that’s important. Another key measure is the number of new business applications per 1,000 residents. This measure is significant because it shows business activity relative to population and allows comparisons across counties.

For example, in 2022, Cecil County received 912 new business applications, the second highest number on the Shore. But when you add county population into the mix, this large number of applications works out to only 8.7 applications per 1,000 residents and lowest on the Shore.

At the other end of the spectrum, Worcester County received 13.5 applications per 1,000 residents, the highest on the Shore, even though total number of applications received, 725, was lower than Cecil (912) and Wicomico (1,323).

All Eastern Shore counties were below the 15.1 applications per 1,000 nationally.

It’s impossible to tell from these data what kinds of businesses have submitted applications, but it’s more likely that the applications are for small businesses than for large. And that’s a good thing. Small businesses have definite advantages for communities such as ours.

According to the U.S. Small Business Administration, there are over 30 million small business in the U.S. — 99.9% of all businesses. Small businesses account for over half of all job creation and economic activity (measured by GDP) in the country. Small businesses employ 60 million American workers (47.5% of all employees). According to the Census Bureau, the majority of U.S. businesses have fewer than five employees.

Much has been written about the effects of dollar stores and big-box stores in communities. Studies show that these retailers drive out small, locally-owned businesses, depress wages, and contribute far less to the local economy than independent businesses.

Communities benefit from small, locally-owned businesses because:

Locally-owned businesses reflect the local culture and community identity.
They contribute to civic and cultural life.
Local merchants tend to be far more committed to the well-being and long-term stability of a community.
If you spend $100 at a locally-owned business, $68 circulates and remains in the community.
If you spend $100 at a national chain, only $43 stays in the community.

Smart economic development policies at the local level can keep our small Eastern Shore towns vibrant and sustainable.

Jan Plotczyk spent 25 years as a survey and education statistician with the federal government, at the Census Bureau and the National Center for Education Statistics. She retired to Rock Hall.

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