The pandemic crisis has put a lot of pressure on entrepreneurs. With the disrupted supply chain and high restrictions, they had limited operations. As a result, many businesses opted to close temporarily or permanently. It marked a massive downturn in the US economy since the Global Financial Crisis in 2008.
Today, the country sees a new hope amidst the continued vaccination and border reopenings. Companies in most cities are returning, stimulating production, income, and market demand. Thanks to the strategic recovery roadmap of the local government, like in Chicago. It now offers more optimistic growth prospects across industries.
Hence, we will discuss how and how much Chicago suffered and recovered. We will also list down the ideal business types in the city.
Chicago’s Setbacks and Recovery Amidst the Pandemic
The pandemic caused massive damages to the business sector. In Illinois alone, the GDP dropped by 4.11% from Q1 to Q2 2020. The most affected industries were services, transportation and logistics, and manufacturing. At the end of the first quarter of 2020, 33,702 businesses closed, resulting in a net decrease of 3,885. Small and medium enterprises accounted for 98.3% of temporary and permanent closures. Likewise, employment had a net contraction of 5,898, with the vast majority coming from SMEs.
As a key city of the state, Chicago was one of those that suffered the most. The industries above were also its primary growth drivers, which caused a gloomy economic condition. There were 4,400 Chicago-area business closures during the first half of the year. Fifty-five percent of business owners said they would never reopen. But it regained its footing as the restrictions were eased.
The improvement became more evident in the following months, although the path to recovery was not straight and smooth. Its funding recovery plan proved effective, from the allocation to its execution. Out of the $2.547 billion budget, $1.887 billion went to the Local Fiscal Recovery Plan (LFRP). The remaining amount was allocated to its GO Bond Initiatives. It could aid small and medium businesses and enhance the healthcare system.
It also helped that Chicago is the second-largest concentration of Fortune 500 headquarters. In 2021, more corporations and LLCs had mergers and acquisitions (M&A) and went public, stimulating the city’s rebound. It helped expand the business sector and drop the unemployment rate to 4.3%. More households increased their purchasing power, leading to an aggregate demand surge. In turn, businesses saw more opportunities for growth as the fiscal relief continued.
Best Types of Business to Establish in Chicago
According to Forbes, Chicago is a top-three city for startups. The opening of about 146,000 businesses in Q1 2021 is a testament to its swift and sustained rebound. Despite the transmission surges that hampered its movement, the city remained geared toward growth. Given its current market landscape, aspiring entrepreneurs must study each industry. These are several ideal business types to start in the city.
Amidst the vaccination arguments in the US, going out can still be risky. Salons are a staple to women, especially those working in the tourism industry. But even the stay-at-home moms will grab the opportunity to maintain their beauty during these stressful times. Mobile salons are a great way to provide services on every doorstep. Also, it is cheaper since you do not need physical locations. You only have to spend on the equipment, beauty products, and workforce.
Software Training Services
Chicago ranked sixth on the Innovation Cities Index in the US. It is also home to Accenture, one of the largest IT companies worldwide. Many data science graduates in the US flocked to the city. It is no surprise that software skills have a high demand. In the same way, it makes software training businesses viable. Programming and graphic designing are some of the training you can provide.
Tour Guide Services
Chicago is a bustling yet breathtaking city in the US. It ranked first on the most connected airports in North America and first globally. Today, borders are reopening, making travel and leisure a favorite hobby. After a year of stringent restrictions, the pent-up demand is visible as more tourists visit the city. Therefore, tour guide services are integral to its tourism industry.
For safer outdoor activities, tourists need people to accompany them around the city. Tourist guides can book hotels and restaurants on their behalf. Once the pandemic is over, the economy will speed up its rebound and growth. At the same time, more people across the globe will go to Chicago. So this type of business is inexpensive and profitable.
The pandemic led to people avoiding going to restaurants and fast-food chains. They chose to have their food delivered to their homes. Food trucks are a creative alternative to fast foods.
And even if restrictions have eased, going out can still be a waste of time to many people. Note that many companies are implementing remote and hybrid work setups. Engaging in a food truck business is affordable without thinking about your brick-and-mortar.
You may serve easy-to-cook foods like burgers, noodles, and waffles. Pasta and pizza are also good options.
Car Rentals or Taxi Services
Public transportation, including buses and trains, can be a primary source of infection. The fear made many Americans shift to buying new and used cars. This mania has led to skyrocketing prices in the past two years. They already exceeded the pre-pandemic prices, so analysts thought prices would decrease. Unfortunately, both remain stubbornly high.
What makes car rentals and taxi services a lucrative business in this current situation? The possible answers are the preference to travel in private and the rising gasoline prices. The upsurge in gasoline prices remains evident in all parts of the US. Its high costs matched with the hassle of boarding buses and trains make car rentals and taxis the best alternatives. Of course, you have larger competitors like Uber and Grab, so you must have price and service strategies.