A new study has found that record numbers of people are starting new businesses, with more women and minorities joining the entrepreneurial world. Business applications surged in 2020 at the start of the pandemic, and this trend has continued with more than 5 million applications filed in 2021 and 2022, reaching a record 5.5 million applications in 2023. Payroll firm Gusto conducted a survey of 1,300 small business owners who launched their businesses last year to better understand their characteristics.
According to the survey, 49% of the new business owners were women, marking an increase from previous years. In 2019, just 29% of new business owners were women. However, women still face challenges in attracting investors compared to men. In 2023, only 3% of women entrepreneurs received private capital investments to start their businesses, while 9% of male entrepreneurs received investments.
The study also revealed that black entrepreneurs accounted for 6% of new business owners in 2023, doubling the rate seen before the pandemic. Hispanic entrepreneurs made up 13% of new owners, compared to 8% the previous year. Additionally, more businesses are being started as “side hustles,” with 44% of entrepreneurs launching new businesses in 2023 while working other jobs, up from 27% in 2022. This suggests that many entrepreneurs are using their businesses to supplement their income from full-time or part-time jobs.