How many new businesses started in 2021 & 2022?

As of May 2022, there are over 30 million small businesses, including existing and new businesses. That’s quite a large number of small businesses.

The number of new businesses created in the United States surprisingly increased between 2020 and 2021.

Likewise, even more new businesses were started between 2021 and 2022.

Some reasons for the new business boom include pandemic layoffs and the desire to work from home or because people want to work for themselves.  

These are merely predictions about why new business growth has been so impressive in the United States.

However, there are some positive statistics that prove the number of new businesses started in 2021 & 2022. 

In 2021 alone, the creation of new businesses soared to record highs. According to the United States Census Bureau, 5.4 million new applications for businesses were filed. 

The former record-breaking number of new businesses was 4.4 million set in 2020. Will That be beaten in 2022?  

It seems that the pandemic increased the United States population’s entrepreneurial spirit.

How Many Businesses Started in 2021 & 2022?

Business

In the first quarter of 2022 alone, over 1.4 million new businesses were created.

There are currently over 30 million small businesses in the United States, which includes new businesses started in 2021 & 2022.

These over 30 million small businesses in the United States make up 99.9% of all businesses in the country.

Was the great resignation more about new businesses being started in 2021 and 2022 than it was about people resigning from their jobs?

When we look at the numbers for 2021 where 5.4 million new business applications were filed, that could be a good assumption. 

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According to Yelp and CNBC, 516,754 businesses were started in the United States between April 2020 and March 2021. 

Next, we will discuss the demographics related to new businesses started in 2021 & 2022.

Who Is Starting New Businesses in 2021 and 2022?

Generational  

According to Guidant Financial, Gen X-ers have the most new businesses at 46.5%.

Baby boomers have the second most new businesses at 45.5%. Surprisingly Millennials only have 7% of the market share of new businesses. 

Gender 

New business creation is still unbalanced in the gender demographic. Men hold 77.5% of the market share in new business creation.

Women have 23.4% of the market share. Another 0.2% of the new business market share is from self-described genders.

Race 

The Caucasian population still makes up the largest demographic of small business owners in 2022 at 84.7% 

The Hispanic and Asian demographics are tied at 4.1% of the small business ownership market share.

Black or African Americans make up 4% of the small businesses in America. 

What Are the Top New Business Categories? 

The top industry of new businesses occurs in the Retail sector where 15.1%. This includes eCommerce and storefronts.  

The restaurant and food industry has 13.7% of the market share for how many new businesses started in 2021 & 2022.

Business services are third with 10.1% of the market share. Health, fitness, and beauty services have 9.7% of the market share and commercial and residential services have 9.3%.

More than half (54.6%) of survey respondents said that they don’t believe the impact from the pandemic on business is over.

From the same survey, 26.1% said they are unsure if the pandemic’s impact on business is over, and 19.4% believed that it’s over.

How Much Do United States Small Business Owners Make?

In the United States, the average income for a small business owner is about $63,560. The range for small business owners is between $30,000 and $140,000 annually.

Mostly the differences between incomes among small business owners in the United States comes from the type of industry chosen.

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Also, small business owners with an online presence and solid marketing strategies are apt to generate more revenue, resulting in higher income. 

How Much Should Small Business Owners Pay Themselves? 

It’s common practice to put back 30% of the net revenues of a business for taxes. For instance, if your revenue is $100,000, save back $30,000 to pay your taxes. 

That leaves you with $70,000 for investing and reinvesting in your business plus paying yourself. If you have employees, you must pay them first. 

Also, set aside enough for overhead and maintenance expenses. Then, you can pay yourself. 

Generally, it’s recommended to pay yourself 10% of your net profits. 

How Many Businesses Started in 2021 & 2022 Will Fail or Succeed?

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In general, 90% of all startups eventually fail. Most of these new businesses have less than $5,000 with which to start their businesses. 

According to Moneyzine, research shows 70% of all startups are established at home. Around 40% of startups become profitable. 

Fortunly says that only 78.5% of all small businesses make it through their first year. Also, the main reason small businesses fail is due to the lack of capital. They just run out of money to stay in operation. 

It’s common for some industries to survive better than others. In fact, only 17% of restaurants fail during their first year. That may be the lowest failure rate across industries. 

Conclusion

After reading this article, you know how many new businesses started in 2021 & 2022.

You also learned about who started new businesses over the year, what industries were most involved, and the average success and failure rates.  

Now that you have this data, will you start a new business? Do you feel like you know how much to pay yourself if you do start a new business?  

Most people do believe that the trend of record-breaking new business creation will continue for some years to come.

What do you think?

Does that information make you want to join the ranks of new businesses started in 2021 & 2022?

Sources

BookkeptChannelE2ECNBC
MoneyzineNasdaqNPR
ForbesFortunlyGuidant Financial
The BalanceYelp