Over the past 6 months new business applications have surged.
As the U.S. Census chart below shows (click to enlarge), the surge is continuing with 492,000 applications filed in January. This us up 73% compared with last January.
Most of the applications are what the Census calls "applications other than high propensity" (grey in the chart). These are applications from businesses that are unlikely to have employees, such as freelancers, independent contractors and other types of solopreneurs.
But employer small business applications (high propensity applications) have also surged.
The business applications data comes from IRS Employment Identification Numbers (EIN) applications. EIN's are the tax id number that identifies a business.
Not all small/solopreneur businesses have EINs. Some, and especially independent workers working part-time, use their social security numbers instead. But almost all employer businesses have EINs.
While only about 15%-20% of applications have historically turned into actual small businesses, the surge indicates we should see strong growth in the number of independent workers and employer small businesses over the next 2 years.
See our prior posts on the surge in new business applications for more details on the surge.
See the U.S. Census Business Formation Statistics site for more data.
