According to the Small Business Administration, more than 600,000 new businesses open every year in the U.S. However, there are even more pertinent new business formation statistics that the U.S. Census Bureau recently shared.
For example, the New Business Formation Statistics Report shows that a total of 423,153 U.S. Business Applications were filed in April 2022.
However, not all new businesses make it past their first year — or even their first five years. In fact, the U.S. Bureau of Labor Statistics (BLS) reports that:
“20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.”
Now, let’s take a closer look at what new business formation statistics say about specific industries.
As shown through Monthly Business Applications by NAICS Sector, Retail Trade, Transportation and Warehousing, and Accommodation and Food Services had the highest number of new business formation applications.
The highest-growth industry right now
According to the new business formation statistics, the Accommodation and Food Services industry has the highest percentage of new companies. This is a significant increase — 15.6% — from the previous year. Additionally, it is important to understand why this industry is seeing such success.
Firstly, this industry is growing thanks to an increase in travel and tourism. According to the World Travel & Tourism Council, “Travel & Tourism’s contribution to contribution increased by US$1 trillion (+21.7% rise) in 2021.”
The growth is expected to continue following the end of the pandemic.
Secondly, new businesses in Accommodation and Food Services are seeing success after an increase in delivery and take-out options. With more caution around eating out, many restaurants have turned to these options as a way to stay afloat.
Thinking of starting a new business in this sector?
It’s clear that new businesses in the Accommodation and Food Services industry are benefitting from changes in consumer behavior.
As the industry continues to grow, we can expect to see even more new businesses popping up.
What are some other new business formation statistics that you find interesting? Drop them in the comments below!
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