Editor’s Note: This story originally appeared on Smartest Dollar.
Entrepreneurship is one of the most powerful forces in the U.S. economy. The Small Business Administration classifies 13% of all establishments as startups and estimates that there are a total of 31.7 million small businesses in the U.S.
Historically startups have been a greater engine of job creation than established firms, typically producing between 2 million and 3 million new jobs per year. Startups continue creating jobs even during economic downturns, while established companies are more likely to shed employees as a cost-saving measure.
Despite fears of a downturn, one reason for continued economic optimism is an elevated level of new business creation since the start of the COVID-19 pandemic. Access to capital — such as government stimulus, low interest rates, and fast-rising values for homes, stocks, and other assets — gave more people the financial resources to start businesses.
Following are the U.S. metropolitan areas with the most new businesses per capita.
15. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
- New business applications per 1,000 residents: 20.49
- Total new business applications (2021): 127,969
- 1-year change in new business applications: +27.5%
- 2-year change in new business applications: +70.0%
14. Austin-Round Rock-Georgetown, TX
- New business applications per 1,000 residents: 20.51
- Total new business applications (2021): 46,835
- 1-year change in new business applications: +34.5%
- 2-year change in new business applications: +52.4%
13. Detroit-Warren-Dearborn, MI
- New business applications per 1,000 residents: 20.81
- Total new business applications (2021): 91,417
- 1-year change in new business applications: +11.0%
- 2-year change in new business applications: +65.4%
12. Denver-Aurora-Lakewood, CO
- New business applications per 1,000 residents: 21.00
- Total new business applications (2021): 62,226
- 1-year change in new business applications: +15.9%
- 2-year change in new business applications: +28.2%
11. Dallas-Fort Worth-Arlington, TX
- New business applications per 1,000 residents: 21.02
- Total new business applications (2021): 160,518
- 1-year change in new business applications: +25.8%
- 2-year change in new business applications: +62.6%
10. Houston-The Woodlands-Sugar Land, TX
- New business applications per 1,000 residents: 21.20
- Total new business applications (2021): 150,971
- 1-year change in new business applications: +27.5%
- 2-year change in new business applications: +75.2%
9. Charlotte-Concord-Gastonia, NC-SC
- New business applications per 1,000 residents: 21.65
- Total new business applications (2021): 57,600
- 1-year change in new business applications: +26.1%
- 2-year change in new business applications: +70.8%
8. Las Vegas-Henderson-Paradise, NV
- New business applications per 1,000 residents: 24.42
- Total new business applications (2021): 55,319
- 1-year change in new business applications: +30.0%
- 2-year change in new business applications: +64.8%
7. Memphis, TN-MS-AR
- New business applications per 1,000 residents: 24.83
- Total new business applications (2021): 33,218
- 1-year change in new business applications: +25.1%
- 2-year change in new business applications: +122.6%
6. Jacksonville, FL
- New business applications per 1,000 residents: 25.18
- Total new business applications (2021): 40,436
- 1-year change in new business applications: +29.3%
- 2-year change in new business applications: +70.7%
5. Tampa-St. Petersburg-Clearwater, FL
- New business applications per 1,000 residents: 25.22
- Total new business applications (2021): 80,089
- 1-year change in new business applications: +27.4%
- 2-year change in new business applications: +63.2%
4. New Orleans-Metairie, LA
- New business applications per 1,000 residents: 25.65
- Total new business applications (2021): 32,617
- 1-year change in new business applications: +9.1%
- 2-year change in new business applications: +69.4%
3. Orlando-Kissimmee-Sanford, FL
- New business applications per 1,000 residents: 30.76
- Total new business applications (2021): 82,239
- 1-year change in new business applications: +28.6%
- 2-year change in new business applications: +68.1%
2. Atlanta-Sandy Springs-Alpharetta, GA
- New business applications per 1,000 residents: 39.05
- Total new business applications (2021): 237,781
- 1-year change in new business applications: +17.0%
- 2-year change in new business applications: +83.4%
1. Miami-Fort Lauderdale-Pompano Beach, FL
- New business applications per 1,000 residents: 44.14
- Total new business applications (2021): 270,966
- 1-year change in new business applications: +24.0%
- 2-year change in new business applications: +58.6%
Methodology
The data used in this study is from the U.S. Census Bureau’s Business Formation Statistics dataset. To determine the locations with the most new businesses per capita, researchers at Smartest Dollar — a website that compares small-business insurance and products — calculated the number of new business applications per 1,000 residents for the year 2021. In the event of a tie, the location with the greater total number of business applications in 2021 was ranked higher.
