How Many New Businesses Start Each Year?
New business statistics indicate that more and more 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 filed in 2022 totaled 5.07 million. This marks a 6.2% annual decrease and is the first time the number of business applications has fallen since 2018.
Apart from the fall in 2022, new business application filings have generally been rising over the past decade. In 2012, the number of new business applications was 2.58 million. Fast forward five years to 2017, and this figure had increased by 24.1% to 3.2 million.
These new business statistics show that the largest growth over the past decade came in 2020, when the total number of applications grew by 24.6% to 4.38 million.
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New Business Statistics (Q1 2020 to Q4 2022)
The start of 2020 saw fewer people start new businesses in the US. New business statistics from the first quarter of 2020 show a total of 840,662 applications. This represents a 3.8% year-over-year fall and can be attributed to the economic uncertainty triggered by the coronavirus pandemic.
However, sentiment quickly rebounded: Q2 2020 saw 910,704 new business applications—an 8.33% rise from Q1 and a 4.6% increase year-over-year.
The following quarter’s quarterly new business applications hit an all-time high. Around 1.48 million new applications were filed—an impressive 62.1% quarterly increase and a 70% year-over-year jump.
Industry experts say the steep surge in Q3 2020 may be due to the delayed processing of a backlog of applications and the ecommerce boom, which spurred many to start online businesses.
New business statistics show that in 2021, 5.4 million applications were filed, the most in any given calendar year so far.
Analysts credit a part of the 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.
The latest new business statistics from 2023 show that 851,457 new business applications were filed in the first two months. This marks a fractional 0.52% annual decrease from the same period in 2022.