According to the Alabama Department of Revenue, 260,974 business licenses were issued in Alabama in 2023, nearly 15% compared to 2020, when 227,343 were issued during the coronavirus pandemic. increased.
In 2019, 235,426 licenses were issued.
Still, many small businesses in the state are struggling to stay afloat, dealing with high costs and ongoing labor shortages, advocates say.
Greg Cochran, executive director of the Alabama League of Local Governments, said an infusion of billions of dollars in federal aid over three years during the pandemic helped spur new business.
“(It) affected Alabama's economy, which put corporate licensing activity in the black,” Cochran said. In 2020, the league was helping Alabama cities monitor losses related to the pandemic, such as reduced tax revenue related to closed businesses.
“Certainly more money was pumped into our economy through the American Rescue Plan Act and the coronavirus relief efforts directed to businesses and individuals,” Cochran said.
Meanwhile, corporate tax revenue increased by 7.65% from FY2022 to FY2023, to approximately $1.4 billion.
“(The state) has continued to implement policies and laws that are very business-friendly in moving the business community forward, right up until the point where we have a labor shortage,” Cochran said. “I think this speaks to what we’ve been doing at both the state and local level to create a friendly environment to create jobs.”
While the increase in business licenses is positive, Rosemary Erebash, Alabama state director for the National Federation of Independent Business, pointed to another recent statistic: net profits.
According to the U.S. Small Business Administration's Office of Advocacy, 2022 saw an upward trend in the total number of businesses for the first time since the pandemic, with a net number of 5,516. Two years ago, the net loss was 618 cases.
Erebash said small businesses employ about 46% of the state's workforce, but many are still struggling.
“Inflation is so high that we can't find enough employees. Therefore, many businesses have changed their business hours because they are not covered by insurance,” Erebash said. “So they looked at the days when they had the least production. Sometimes they close or reduce their hours because they can't do interviews. That reduces their income and further increases inflation. happen.
“So they may not have had an income before coronavirus. Because of inflation, they haven't been able to keep up.”
Lt. Gov. Will Ainsworth recently discussed his proposal to train more potential workers and increase labor force participation.
