There were 1.15 million applications to get a business tax ID (EIN) in Q4, 2020. This is an impressive 27% increase compared with Q4 of 2019.
As the U.S. Census chart below shows, business applications fell from Q3 by 28%. But Q3 of 2020 was a blow quarter by any measure. So despite the quarter over quarter decline, the Q4 numbers still show very strong growth by historical standards.
When we reported on the Q3 numbers last November, we said:
It's too early to know if this surge is a one-time event, or it signals a substantial uptick in small/solopreneur business formation going forward.
Two quarters is still not enough to declare a long term surge in small/solopreneur business formation. But it's enough to say we're likely going to see a substantial near-term increase in small business formation over the next 2 years.
See our post the Q3 business formation numbers for more detail on the data.
