Record number of people are launching new small businesses, leading to a business boom

A new study shows that more people are starting new businesses than ever before, with an increasing number of women and minorities among them. The trend started in 2020 as the pandemic began, and the number of new business applications has continued to rise. More than 5 million applications were filed in 2021 and 2022, and a record 5.5 million new business applications were filed in 2023.

A survey conducted by payroll firm Gusto of 1,300 small business owners who started their businesses last year revealed interesting findings. Women accounted for 49% of the new business owners, a significant increase from 2019 when only 29% were women. Despite the growth in female entrepreneurship, women still face challenges in receiving investments. In 2023, only 3% of women entrepreneurs received private capital investments, compared to 9% of male entrepreneurs.

Black entrepreneurs constituted 6% of new business owners in 2023, double the rate seen before the pandemic. The percentage of Hispanic entrepreneurs also rose, with 13% of new owners in 2023 compared to 8% the previous year. Additionally, more businesses are being started as side hustles, with 44% of entrepreneurs who started new businesses in 2023 doing so while working another job, either part-time or full-time. This is up from 27% in 2022.

The study suggests that the landscape of entrepreneurship is changing, with more women and minorities taking the leap to start their own businesses. Despite the challenges they face, these individuals are driving a wave of innovation and economic growth.