A high number of individuals are launching new small businesses

According to a recent study, there has been a significant increase in the number of people starting new businesses, with a growing number of them being women and minorities. The trend of starting new businesses saw a substantial rise in 2020 as the pandemic began, and this momentum has continued with a record number of new business applications being filed. In 2021 and 2022, over 5 million applications were filed, and an impressive 5.5 million new business applications were submitted in 2023.

A survey conducted by payroll firm Gusto polled 1,300 owners who started their small business last year to understand their demographics and characteristics. The survey revealed that nearly half of the new business owners were women, marking a significant increase from previous years. In 2019, only 29% of new business owners were women, showcasing the positive shift towards increased female entrepreneurship.

Despite the rise in women and minority entrepreneurs, there is still a disparity in access to private capital. In 2023, only 3% of women entrepreneurs received private capital investment to kick start their businesses, compared to 9% of male entrepreneurs. This emphasizes the need for more support and resources to be directed towards women and minority-owned businesses to help them thrive.

The study also highlighted the growing trend of businesses being started as “side hustles”, with 44% of entrepreneurs who launched new ventures in 2023 doing so while working another job, whether part-time or full-time. This percentage has significantly increased from 27% in 2022, indicating a shift towards balancing entrepreneurship with other work commitments.