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?
Small business applications
Annual change
According to the US Business Formation Statistics (BFS) , the number of new small business applications filed in 2023 totaled 5.49 million (or 5,494,616, to be exact). This marks an 8.1% annual increase and the largest number of applications ever recorded in a calendar year.
Apart from a decline in 2022, new small 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 24.5% to 4.38 million.
More recently, new business statistics from the first quarter of 2021 show a total of 1.37 million applications. This represents a 62.2% year-over-year increase and can be partly attributed to the COVID-19 pandemic.
Industry experts say the steep surge may be due to the delayed processing of a backlog of applications and the ecommerce boom, which spurred many to start online businesses.
Q2 2021 saw 1.45 million new business applications—a 5.8% rise from Q1 and a 59% increase year-over-year. This was also a high for the year, as new business applications fell to 1.3 million and 1.29 million for Q3 and Q4 of 2021. In 2021, a total of 5.41 million applications were filed, the highest 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 was a way to potentially acquire lost income. Some also did so to meet rising and changing consumer demands .
The latest new business statistics from 2024 show that 1.28 million new small business applications were filed in the second quarter. This marks a 5.6% annual decrease from the same period in 2023.
Data from the US Chamber of Commerce shows that nearly one million (978,400) new business applications filed in 2023 were for the retail sector, making it the most popular industry for entrants.
Professional services follows, with 686,200 new business establishments in the sector. The construction industry saw just over half a million new businesses created in 2023. Incidentally, construction is also the second-most common industry for small businesses , with a total of 3.62 million companies currently operating in this realm.
Transportation and warehousing, along with health care and social assistance complete the top five, with 328,400 and 393,800 new business applications in these sectors, respectively.
Where are all these new business applications being submitted? According to the US Chamber of Commerce, the largest number of new business applications submitted in 2023 was in Florida .
| State | No. of new business applications (2023) |
| 1. Florida | 667,031 |
| 2. California | 558,011 |
| 3. Texas | 501,398 |
| 4. New York | 313,481 |
| 5. Georgia | 277,626 |
| 6. Illinois | 174,667 |
| 7. North Carolina | 170,924 |
| 8. New Jersey | 160,996 |
| 9. Pennsylvania | 153,599 |
| 10. Ohio | 148,623 |
Incidentally, the Sunshine State also ranks among the best states to start a business in 2024 and is home to the third-highest number of small businesses , after California and Texas.
Despite the high number of new businesses registered each year, statistically, it’s likely that many of them will not last beyond five years. In fact, the fail rates of businesses published by the US Bureau of Labor Statistics show that more than one-fifth of new businesses shut in their first year.
Fail rates of businesses that started in 2018:
| After one year | 20.6% |
| After two years | 31.3% |
| After three years | 37.9% |
| After four years | 42.7% |
| After five years | 48% |
