How Many New Businesses Start Each Year?
New business statistics indicate that over the past decade, an increasing number of people in the United States started their own businesses.
This should come as 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 2.46 million.
New business statistics show that in 2020, 4.41 million applications were submitted. That’s a whopping 78.9 percent more than the number of applications received in 2010.
New Business Statistics in 2020: Impact of COVID-19
Zooming in to 2020, new business statistics show that more than 4.4 million new companies were started last year. That’s a 26.9 percent increase from 2019 and the biggest increase of the past decade by a mile.
In comparison, the US government received 3.47 million new business applications in 2019—around 4,500 fewer than in 2018—which is a 0.13 percent year-over-year increase and the smallest of the decade.
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 837,854 applications. This represents a 3.4 percent year-over-year fall from Q1 of 2019 and can be attributed to the economic uncertainty triggered by the coronavirus pandemic.
However, sentiment appears to be on the rebound: Q2 2020 saw 883,018 new business applications. That’s a 4.8 percent increase from Q1 and a two percent year-over-year increase.
Q3 2020 saw quarterly new business applications hit an all-time high despite the ongoing pandemic. More than 1.5 million new applications were filed—an impressive 77.5 percent more than second-quarter figures. This marked an 82.3 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.
The high, however, did not last long. New business statistics show that applications tumbled in Q4 with just over 1.1 million applications—a 28.5 percent fall from the previous quarter.