NEW YORK – Record numbers of people are starting new businesses, and more and more of them are women and minorities, according to a new study.
New business applications jumped in 2020 as the pandemic started, and have continued to be filed at a record pace. More than 5 million applications were filed in 2021 and 2022 and a record 5.5 million new business applications were filed in 2023.
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Payroll firm Gusto surveyed 1,300 owners who started their small business last year to discover their characteristics.
Women made up 49% of the new business owners surveyed. That's in line with the past several years, but up starkly from 2019, when just 29% of new business owners were women.
Still, women do not receive as much interest from investors as men. In 2023, just 3% of women entrepreneurs received a private capital investment to start their business, compared to 9% of male entrepreneurs.
Black entrepreneurs made up 6% of new business owners in 2023, double the 3% rate seen before the pandemic. Hispanic entrepreneurs made up 13% of new owners, compared to 8% last year.
Meanwhile, more businesses are being started as “side hustles,” or businesses that supplement day jobs. Forty-four percent of entrepreneurs who started a new business in 2023 did so while working another job, either part time or full time, up from 27% in 2022.