Three-Year Small Business Boom Is Unprecedented

By: Rhett Buttle

A sure sign of the direction of the economy is the number of small businesses opening. On Thursday, the White House announced that the past three years have seen an unprecedented number of entrepreneurs open up shop in their homes and Main Streets across America.

“Every time someone starts a new small business, it’s an act of hope and confidence in our economy,” said President Joe Biden in a statement. “Today, we learned that Americans filed 16 million new business applications during the first three years of my Administration—16 million acts of hope, the strongest stretch on record.”

The U.S. Census Bureau has been tracking business formation statistics since 2004 and the data released on Thursday showed that the nearly 16 million new recorded business applications since the start of the Biden-Harris Administration represent an approximately 85% increase in the average flow of monthly applications relative to the period between 2004 and January 2021. In fact, the monthly average of 440,000 new business applications over the past three years is 46% higher than the average of 2017 through 2020 combined.

Keith Hall, President and CEO of the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community, said, “The consistent, record-shattering rate of small businesses surging throughout the nation is great news for not only our community, but also our local and national economy.”

“As the country continues to emerge from the Covid-19 pandemic and recovers from recent economic volatility, we applaud the courage and grit of all new business owners, especially Black, Hispanic, AAPI, Native, and other business owners who continue to make entrepreneurial leaps in the face of adversity,” said Ying McGuire, CEO and President, National Minority Supplier Development Council. “The resilience displayed by these leaders highlights the spirit of America, and creates new economic opportunities and pathways for success not just for them, but for their communities and the whole country.”

The increase in growth in entrepreneurship has been particularly high among women, Latinos, and Black Americans. Black business ownership is growing at the fastest pace in 30 years with the share of Black households owning a business more than doubling from 5% to 11% between 2019 and 2022. In addition, Latino business ownership rose from 7% to 10% between 2019 and 2022, the fastest pace in more than a decade. However, the greatest growth can arguably be seen in the number of women-owned businesses, as the rate from 2019 to 2023 was 94% greater than the growth of men-owned businesses.

“The President’s announcement of a record 16 million new small businesses in the last three years is a signal that the US economy is working for entrepreneurs, and in turn, that business owners have confidence in the economy,” said Chiling Tong, President and CEO of the National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE). “AAPI businesses have benefited from a stronger economy, with over 2.91 million AAPI owned businesses and counting, fueling job creation and economic growth in their communities.”

While there are many factors for this unprecedented growth, there is a general feeling among small business owners that it would not have happened through laissez-faire capitalism. It appears that the initiatives of the Biden-Harris Administration’s Investing in America Agenda are lifting up small businesses across the country.

“Policies like the Bipartisan Infrastructure Act advance this positive momentum. The $400 billion in investments in all 50 states announced so far, creates ample new opportunities for small businesses while repairing our nation’s roads and bridges and strengthening our supply chains,” said Small Business for America’s Future Co-chair Walt Rowen, who is also President of Susquehanna Glass Company in Lancaster, Pennsylvania.

This growth is connected to other positive aspects with our economy, including 14 million new jobs over the last three years and an unemployment rate that has been below 4% for the longest stretch in more than 50 years. As we kick off 2024, a primary focus for our country should be to build on these successes.

Follow me on Twitter. Check out my website.