How Many New Businesses Start Each Year?
New business statistics indicate that an increasing number of people in the United States have started their own businesses over the past decade.
This is no surprise, given the US’s relatively high rating of 91.6 out of 100 by the World Bank for ease of starting a business.
So then, how many new businesses start each year?
According to the US Business Formation Statistics (BFS), the number of business applications has been on a steady rise since the start of the previous decade.
In 2010, the number of new business applications came in at 2.50 million. But as new business statistics show, in 2020, 4.35 million applications were submitted. That’s a whopping 74 percent more. It is also a 24.19 percent increase from 2019 and the biggest increase of the past decade by a mile.
In comparison, the US government received 3.50 million new business applications in 2019—around 11,000 fewer than in 2018—marking a marginal 0.33 percent year-over-year increase.
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New Business Statistics in 2020 and 2021: COVID-19 Impact
The start of 2020 saw fewer people start new businesses in the US. New business statistics from the first quarter of 2020 show that there were a total of 840,529 applications. This represents a 3.93 percent year-over-year fall and can be attributed to the economic uncertainty triggered by the coronavirus pandemic.
However, sentiment quickly rebounded: Q2 2020 saw 907,714 new business applications—a 7.99 percent rise from Q1 and 4.27 percent increase year-over-year.
Q3 2020 saw quarterly new business applications hit an all-time high. More than 1.46 million new applications were filed—an impressive 60.9 percent quarterly increase and a 69.9 percent year-over-year jump.
Industry experts say the steep surge in Q3 may be due to delayed processing of a backlog of applications and the ecommerce boom, which spurred many to start online businesses.
New business statistics show that applications tumbled in Q4 with just over 1.1 million applications, before rising again to 1.37 million in the first quarter of 2021 and then to 1.44 million in the second quarter. In June 2021 alone, more than 448,000 new business applications were filed.
Analysts credit a part of the recent increase to a “need” from people after having lost their jobs during the pandemic; starting their own business is a way to potentially acquire lost income. Some are also doing so to meet rising and changing consumer demands.