Map: New Business Applications Surge Across the Country

Entrepreneurship is booming in the United States. Over the last few years, the number of applications filed to start new businesses has surged. Application numbers doubled in 2020 compared to recent years, and 2021 and 2022 saw over 5 million applications filed, according to the U.S. Census Bureau.

The trend only accelerated in 2023, with a record-breaking 5.5 million new business applications filed. Explore the data below to understand the new business formation trends across the nation and in your state.

For each state, the interactive map below tracks:

• Percent change of new business applications between December 2022 and December 2023
• Number of new business applications filed in 2023
• State’s ranking of business applications per capita in each state
• The projected business formations within four quarters
• Percentage of applications projected to become employer businesses
• The congressional district(s) with the highest number of new business applications

The Census Bureau’s projected business formations are based on a forward-looking econometric model. This model estimates the likelihood a business application turns into a full-fledged business utilizing data and trends from the preceding four quarters and eight quarters from the month of application. A complete list of the Bureau’s business formation statistics definitions can be viewed here.

The data for states that have significantly higher incorporation rates compared to their population may not accurately reflect projected business formations in those states.

Download the national, state, and county business formation data here. 

Why There Are So Many New Businesses 

Entrepreneurs solve problems, and when America experienced huge problems in a concentrated time frame during the COVID-19 pandemic, entrepreneurs rose to the occasion. New economic needs and changing consumer preferences created more circumstances for new businesses to start. 

Many individuals laid off as a result of pandemic shutdowns turned their ideas and hobbies into a business that could be run from home. The number of non-store retailers skyrocketed as individuals sold goods from home.

Professional and business services also experienced an uptick as entrepreneurs tapped into the need for consulting services. This trend held true in 2023, with most business applications being filed for enterprises in the retail trade and professional services industries.

America’s unique free enterprise system allows for this kind of entrepreneurial growth. And the data clearly shows Americans are hungry to start their own small businesses.

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Starting a business is a cornerstone of the American Dream and allows individuals to solve problems, strengthen society, and earn an income. Additionally, higher costs have prompted individuals to earn additional money through the creation of multiple business entities.

Padded savings and more availability of credit card debt from the pandemic shutdown can serve as a nest egg while an entrepreneur is working to get their business off the ground. Greater access to technology in recent years has also allowed smaller operations across the nation—and the globe—to grow and level the playing field with large firms.

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In addition to the record-high number of applications being filed, the projected number of new business formations that could emerge from those applications is increasing, too. On average, 9.5% of business applications lead to business formations from 2016 to 2019.

Between 2020 and 2023, there were 20.4 million business applications filed, so if past formations as a share of applications are comparable today, we’d expect 1.9 million businesses, or 9.5% of applications, to result in businesses employing workers.

Congress and the Administration should be doing everything possible to ensure these new businesses grow and succeed. The U.S. Chamber of Commerce details how elected officials can foster new entrepreneurs’ freedom to exist and thrive in the Small Business Bill of Rights.

Government must support policy that supports the creation of new business, not hinder it, as new businesses bring more opportunity to our communities. As new businesses grow, they are likely to employ more people in the community and fuel the local economy.

About the authors

Stephanie Ferguson Melhorn

Stephanie Ferguson Melhorn is the Executive Director, Workforce and International Labor Policy. Her work on the labor shortage has been cited in the Wall Street Journal, Washington Post, and Associated Press.

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Lindsay Burton

Lindsay (Cates) Burton is a director on the communications team. She leads strategic communications for member marketing partnerships and small business advocacy programs. She previously worked as a writer and editor at U.S. News and World Report.

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