A recent study has revealed that there has been a significant increase in the number of people starting new businesses, with a notable rise in women and minority entrepreneurs. The surge in new business applications began in 2020 at the onset of the pandemic and has since continued at a record pace. In 2021 and 2022, over 5 million applications were filed, and an unprecedented 5.5 million new business applications were submitted in 2023.
According to a survey conducted by payroll firm Gusto, it was found that women accounted for 49% of the new business owners surveyed. This marks a substantial increase from 2019 when only 29% of new business owners were women. Despite this progress, women entrepreneurs still face challenges in securing investments, with only 3% of women receiving private capital investments in 2023 compared to 9% of male entrepreneurs.
Furthermore, the study highlighted a positive trend in the representation of minority entrepreneurs. In 2023, Black entrepreneurs comprised 6% of new business owners, doubling the pre-pandemic rate of 3%. Hispanic entrepreneurs also saw an increase, making up 13% of new owners compared to 8% in the previous year.
Another noteworthy finding was the growing popularity of starting businesses as 'side hustles' to supplement primary sources of income. In 2023, 44% of entrepreneurs who launched new businesses did so while working another job, whether part-time or full-time. This represents a significant increase from 27% in 2022, indicating a shift towards entrepreneurial endeavors as a means of diversifying income streams.
