Are you thinking about starting your own business?
If so, you’re not alone. Although we’ve seen rising prices for goods and services and creeping interest rates, our report indicates something exciting is happening: a remarkable number of new businesses are launching in regions and particular cities across the nation.
Our Simply Business research team took a deep dive into data from the U.S. Census Bureau and came back with some encouraging findings for people looking to start their own business. We have some highlights below, and you can read the in-depth report here.
Takeaway #1:
New business applications rose rapidly during COVID — and remain elevated now.
For much of the 2000s and 2010s, business applications hovered between 2.5 million and 3.5 million annually. In 2020, however, applications spiked dramatically, reaching 4.35 million—a roughly 25% increase from the previous year. This trend accelerated further in 2021, with applications exceeding 5.3 million, and has since stabilized.
Despite inflation and increased borrowing costs since 2022, new business applications have continued to exceed pre-pandemic norms, with 5.45 million applications filed in 2023. Early 2024 figures show a potential year-end total near 5.2 million.
According to Simply Business Senior Insights Manager, Hunter Threadgill, Ph.D, “Small businesses are the lifeblood of the American economy.” On what this means for aspiring small business owners, he continued, “These trends highlight what we’re seeing as an increase in new opportunities for individuals, families, and communities.”
Takeaway #2:
The biggest surge in new business applications come from Wyoming and Delaware.
Source: Simply Business analysis of U.S. Census Bureau data | Image Credit: Simply Business
New businesses are booming in a number of states, with business-friendly Wyoming and Delaware at the top of the list. Wyoming business applications more than tripled between 2019 and 2023, resulting in an additional 39,609 applications. Delaware business applications grew by 113%, adding 29,244 new applications.
Other regions of the country are close behind. New Mexico led at +92.1%, followed by Sun Belt states South Carolina (+77.9%), Alabama (+72.2%), and Florida (+69.5%). New business applications in Texas also posted an above-average increase of 63.4%.
These states tend to have either favorable tax rates, privacy laws, filing requirements, or some combination of the three that make them appealing to business owners.
An interesting conclusion we can start to draw from that is related to requests for insurance quotes. Traditionally, purchasing insurance is one of the first steps a business will take as it prepares to launch. Internal Simply Business data correlates with the findings from the census research with quote requests increasing in many regions, specifically in Florida, California, and Texas.
Source: Simply Business analysis of U.S. Census Bureau data | Image Credit: Simply Business
Takeaway #3:
High-growth areas often reflect favorable start-up conditions.
Investor Charlie Munger said, “Fish where the fish are.” Knowing the best cities for a startup” can help if you’re looking to set up shop. These areas typically share favorable business conditions, such as supportive local policies, growing populations, and affordability. We’ve put together a breakdown of the metropolitan areas and states experiencing the largest surge in new business applications in the infogram below.
Source: Simply Business analysis of U.S. Census Bureau data | Image Credit: Simply Business
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