How Many New Businesses Started In 2022?
5,044,748 new businesses were established in the United States in 2022. Although this figure reflects a slight decline from 2021, it still represents a remarkable achievement in new business formation, particularly in the context of a post-pandemic recovery. For comparison, 4,381,415 new businesses were created in 2020, which was a record at that time.
Initially, the pandemic caused a temporary slowdown in business applications, but it ultimately fostered an environment that has proven beneficial for the long-term establishment of new businesses.
The number of new businesses in 2021 surged by 23% compared to 2020, which itself had recorded an explosive growth rate of 24.7% from 2019 to 2020.
Business Formations in the U.S. 2019-2022
| Year | New Businesses Formed | Year-over-Year Growth |
|---|---|---|
| 2019 | 3,514,509 | 0.44% |
| 2020 | 4,381,415 | 24.67% |
| 2021 | 5,388,282 | 22.98% |
| 2022 | 5,044,748 | -6.37% |
Prior to this surge, the number of new businesses in the U.S. from 2018 to 2019 experienced negligible growth (0.4%).
What Region Started the Most New Businesses in 2021?
The South was the leading region for new business creation in 2021. A total of 2,529,309 new businesses were established in the South, accounting for approximately 47% of all new businesses formed in the United States that year.
In contrast, the Northeast saw the fewest new business formations in 2021, with just 804,888 new businesses.
Business Formations in the U.S. 2021
| Month | U.S. | Northeast | Midwest | South | West |
|---|---|---|---|---|---|
| January | 492,133 | 77,910 | 85,503 | 224,859 | 103,861 |
| February | 423,095 | 64,383 | 72,007 | 196,196 | 90,509 |
| March | 440,165 | 65,051 | 74,710 | 205,161 | 95,243 |
| April | 487,939 | 69,074 | 87,143 | 232,216 | 99,506 |
| May | 500,219 | 69,899 | 85,427 | 243,617 | 101,276 |
| June | 448,533 | 62,798 | 74,535 | 219,267 | 91,933 |
| July | 454,460 | 66,518 | 74,598 | 216,492 | 96,852 |
| August | 427,842 | 65,834 | 70,027 | 199,194 | 92,787 |
| September | 431,381 | 65,462 | 70,193 | 200,538 | 95,188 |
| October | 432,101 | 66,441 | 70,103 | 200,743 | 94,814 |
| November | 432,034 | 66,062 | 69,909 | 198,939 | 97,124 |
| December | 418,380 | 65,456 | 68,556 | 192,087 | 92,281 |
| Total | 5,388,282 | 804,888 | 902,711 | 2,529,309 | 1,151,374 |
What Month Were the Most New Businesses Formed in 2022?
October 2022 was the peak month for new business formations, with 432,834 new businesses established during that period.
Business Formations Per Month in the U.S. 2022
| Month | Number of New Businesses |
|---|---|
| January | 430,411 |
| February | 419,518 |
| March | 413,958 |
| April | 423,153 |
| May | 420,586 |
| June | 410,348 |
| July | 425,698 |
| August | 421,503 |
| September | 425,741 |
| October | 432,834 |
| November | 418,905 |
| December | N/A |
However, this did not set a new record for single-month business formations. That distinction still belongs to July 2020, when 552,748 new businesses were created, marking the highest monthly total in U.S. history.
New Business Formation FAQ
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How much does it cost to start a business?
Starting a new microbusiness typically costs around $3,000, while launching a business with five employees can require approximately $185,000. For home-based businesses, initial costs can be as low as $500, such as for blogging or consulting.
However, businesses that necessitate physical locations, payment processing, regulatory compliance, and payroll can incur significantly higher startup costs.
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How many small businesses are there in the United States?
There are approximately 32.5 million small businesses in the U.S. Notably, 56% of these businesses employ between one to four individuals, and 18% of all U.S. employees work for businesses with fewer than 20 employees.
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How many people are employed by small businesses in the United States?
Approximately 61.2 million individuals are employed by small businesses in the United States. It’s widely acknowledged that small businesses are fundamental to the American economy.
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What is the success rate of small businesses?
The success rate of small businesses is 80% in the first year, dropping to 25% by the 15th year. Success rates vary based on the age of the business, with an average success rate of 55% during the first five years. Unfortunately, the chances of survival decrease significantly as businesses age.
Despite these challenges, small businesses continue to employ 46.8% of the U.S. labor force and generate 45% of the nation’s economic activity.
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Are small businesses important to the US economy?
Yes, small businesses play a vital role in the U.S. economy. They contribute approximately 45% of the U.S. GDP and employ nearly 60 million Americans.
Given that almost half of American workers rely on small businesses for their livelihoods, and the economy depends on them for essential goods and services, their significance cannot be overstated.
References
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U.S. Census Bureau. “Business Formation Statistics.” Accessed on March 1, 2022.
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Zippia. “Small Business Statistics.” Accessed on March 1, 2022.
Author
Matthew Zane is the lead editor of Zippia's How To Get A Job Guides. He is a teacher, writer, and world-traveler that wants to help people at every stage of the career life cycle. He completed his masters in American Literature from Trinity College Dublin and BA in English from the University of Connecticut.
