SBA Hot Topic Tuesday – New Businesses are Up 25% in 2023

September 12, 2023

Delaney Sexton
Contributing Editor

SBA Hot Topic Tuesday – New Businesses are Up 25% in 2023

In a recent study, Yelp reported that the number of new small businesses in 2023 is set to beat 2022’s all-time high. Minority-owned businesses and businesses in the hotel & travel industry are flourishing beyond the national average.

Each month of 2023 has seen growth of at least 15% in new businesses compared to that same month over the past four years. Every month has set an ongoing all-time high for new businesses since 2019. From the first seven months of 2022 to the first seven months of 2023, the national average of new businesses rose by 25%. When compared to 2019, new businesses are up by 46%.

Yelp found that new business openings in 2023 increased across all business categories. Some of the lead industries in new business growth are hotels & travel (39% increase), home services (37% increase), auto (27% increase), event services (27% increase), and local services businesses (23% increase).

New minority-owned businesses are following the growth trend too. This year there have been more than 33,000 new women-owned business openings, up 19% from 2022. New Black-owned businesses and new Latinx-owned businesses have both risen 28% in the last year. The influx of minority-owned businesses shows that lenders are reaching underserved markets.

The positive expansion of new businesses is also being tracked across all U.S. states for the first time, but the states on the East Coast are experiencing the most significant growth rate of new businesses in the last year. At the head of new business opening growth is Rhode Island (46% increase), West Virginia (46% increase), Delaware (45% increase), and Vermont (38% increase).

Whilst Eastern states are seeing a higher percentage of new businesses, other states have the greatest number of total new business openings. Those states include California, Florida, Texas, New York, and Georgia. More specifically, the metropolitan areas of these states are driving the highest number of new openings in 2023.

Yelp Economic Average