How Many New Businesses Started In 2022?

5,044,748 new businesses started in 2022 in the United States. While this is a slight decrease from 2021, it still marks a record-breaking number of new businesses post-pandemic. For example, 4,381,415 new businesses were formed in 2020, which had broken the previous record at the time.

While the pandemic’s immediate effect on business was a slowdown in new applications for a couple of months, it appears that it’s been a long-term net positive for new business formation.

The number of new businesses in 2021 in the United States grew by 23% from 2020. In 2020, the rate of growth was even more explosive. From 2019 to 2020, the number of new businesses in the U.S. grew by 24.7%.

Business Formations in the U.S. 2019-2022

This was anything but the norm, as the number of new businesses formed in America from 2018-2019 barely grew at all (0.4%).

What Region Started the Most New Businesses in 2021?

The South started the newest businesses in 2021. 2,529,309 new businesses were started in the South over 2021 — about 47% of the total new businesses formed in the United States overall.

In comparison, the Northeast formed the least new businesses in 2021, at 804,888.

Business Formations in the U.S. 2021

What Month Were the Most New Businesses Formed in 2022?

The most new businesses were formed in October of 2022. 432,834 new businesses were started in that month.

Business Formations Per Month in the U.S. 2022

This did not, however, break the single-month record. In July 2020, 552,748 new businesses were formed, setting the single-month record for new business formations in the U.S.

New Business Formation FAQ

1. How much does it cost to start a business?

   It costs around $3,000 to start a new microbusiness, while a business with five employees requires roughly $185,000 to start up. Start-up costs can be as low as $500 for single-person businesses that can be done from home, like blogging.

   But for businesses that require things like a physical location, payment processing, compliance with regulations, and payroll, start-up costs can increase sigfnicantly.

2. How many small businesses are there in the United States?

   There are 32.5 million small businesses in the United States. 56% of these businesses have fewer than between one to four employees. Additionally, 18% of all U.S. emploees work for a small business with fewer than 20 employees.

3. How many people are employed by small businesses in the United States?

   61.2 million people are employed by small businesses in the United States. Politicians pay lip service to it all the time, but it’s true that small businesses are the backbone of the American economy.

4. What is the success rate of small businesses?

   The success rate of small businesses is 80% in the first year, down to 25% by year 15.

   Success rates for small businesses vary based on the number of years a business has been in operation. On average, small businesses have a 55% success rate during their first five years of operation. Success rates, however, tend to drop as a small business ages. It’s estimated that 25% of small businesses survive past their 15th year.

   Although success rates for small businesses aren’t as promising as those for larger businesses, small businesses continue to employ 46.8% of the U.S. labor force, generating 45% of the nation’s economic activity.

5. Are small businesses important to the US economy?

   Yes, small businesses are extremely important to the US economy. An estimated 45% of US GDP is tied to small businesses and nearly 60 million Americans are employed by small businesses.

   With nearly half of American workers dependent on small businesses for an income, and the entire country depending on them for essential goods and services, it’s evident that small businesses are very important for the US economy.

References

1. U.S. Census Bureau. “Business Formation Statistics.” Accessed on March 1, 2022.

2. Zippia. “Small Business Statistics.” Accessed on March 1, 2022.

Author

Matthew Zane

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.