Record Number Of New Businesses Opening, As Many Turn Hobbies Into Companies

More new businesses opened in Q1 2021 than at any other time during the past 12 months, although total numbers fell from the previous year. Re-openings also hit their highest levels since Q2 2020, according to a report released Wednesday.

Many are turning their hobbies into businesses, and it's likely that few know the ins and outs of search advertising or social marketing.

For example, 5,682 dessert shops opened, as well as 1,694 cupcake shops and 161 shops that specialize in macarons.

Yelp released its Q1 2021 Yelp Economic Average (YEA) report today highlighting some key trends. The methodology is a little different for this quarter, compared with the past. For this quarter, openings were determined by counting new businesses listed on Yelp, which are added by either business owners or Yelp users.

To calculate business re-openings, Yelp, on each day beginning with March 1, 2020, counted U.S. businesses that were temporarily closed and reopened through March 31, 2021. It’s important to note that a re-opening is categorized as a temporary closure.



During the first quarter, restaurant and food business openings rose 5% to 18,217 in the past year and were down by 4% from Q1 2019.

Professional, local, home and auto sectors also saw a significant number of new business openings rose 5% to 79,332 and up by 23% from Q1 2019, during the same time period.

Of those, home services had the highest number of new openings in Q1, up 4% to 48,592; followed by local services, rising 16% to 16,602; professional services rising 2% to 14,134; and auto services rising 10% to 9,790.

More than half a million new businesses opened in the past year, and Q1 hit the highest level since pandemic began

  • Over the course of the last year, there were 516,754 new business openings in the U.S., down by only 11% YoY
  • 146,486 new businesses opened in Q1, down by only 2% year-over-year (YoY) and up by 4% from Q1 2019 
  • Nearly every state in the U.S. saw an increase in new openings in Q1 2021, compared to Q4 2020

Business re-openings accelerate in Q1 – climbing to 258,191 since March 1

  • Re-openings in each month of the first quarter were the highest they have been since August 2020.
  • Bars, sandwich shops, coffee houses, breakfast and brunch spots and massage therapists all experienced more than 50% of their reopenings in Q1, since August. 
  • American restaurants, hair salons, and gyms saw 40% of their re-openings in Q1, since August.

Consumer are beginning to return to pre-pandemic activities

  • In preparation for a less isolated spring season, personal services such as laser hair removal saw a 787% increase in consumer interest in New York and interest in cosmetic surgery increased by 300% in Hawaii, New York, California, and Florida
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