The U.S. Census Bureau revealed that close to 5.5 million businesses were started in 2023, which is now the record amount, according to the Commerce Institute. This metric has reportedly risen since the COVID-19 pandemic, seeing 5 million or more total applications for both 2021 and 2022.

What a separate survey found

Gusto, a payroll firm, surveyed a total of 1,300 owners who started a business last year “to discover their characteristics,” per The Associated Press.

In its 2023 research, the firm found significant rates among women and minorities. Here’s a list gathered and assessed by The Associated Press:

• Forty-nine percent of the new owners were women — an amount that was recorded at only 29% in 2019, and has risen since the pandemic.

• Six percent of the new owners were Black, a number that has doubled since before the pandemic.

• Thirteen percent of the new owners were Hispanic.

A good amount of the new businesses were made as side hustles to supplement day jobs. The Associated Press reported that 44% of the new owners claimed their business was used as such, whether the day job was part time or full time. This amount was at 27% in 2022.

States with the most businesses started in 2023

The U.S. Chamber of Commerce in its 2023 report found that Florida had the largest amount of small businesses filed last year, measuring at more than 667,000 applications. California and Texas were the next closest states, each receiving more than 500,000 applications.

Along with this, the report saw Colorado having the highest “percentage change of new business applications” filed in December 2023 compared to December 2022.

Will these new businesses last?

Despite 99.9% of all firms comprising of small businesses, per a 2021 report from the U.S. Small Business Administration, the Commerce Institute mentioned that most businesses don’t last past a decade. Here’s the statistics for new businesses:

• Seventy percent of them continue beyond two years.

• Fifty percent of them continue beyond five years.

• Thirty percent of them continue beyond 10 years.

• Twenty-five percent of them continue beyond 15 years.

For reference, there are reportedly more than 33 million small businesses in the U.S., employing more than 61 million people as of 2023 reports, according to NerdWallet.

Why was there an increase in small businesses last year?

The Commerce Institute reported on a 2020 analysis by The Economist, suggesting that the pandemic became the catalyst of the small-business awakening, as millions of people lost their jobs and stimulus checks fueled the means to start one.

The U.S. Chamber of Commerce in a separate report mentioned that the pandemic “created more circumstances for new businesses to start,” citing the change made individuals turn “their ideas and hobbies into a business that could be run from home.”

“People are looking for working arrangements that are more suitable to how they want to live their lives,” Steven Davis, an economist at the University of Chicago Booth School of Business, said during a 2022 roundtable event hosted by the Economic Innovation Group, per Axios.