A record number of people are starting new businesses, with more women and minorities joining the entrepreneurial world. In 2023, more than 5.5 million business applications were filed, reaching a new high after surging in 2020 at the start of the pandemic. Payroll firm Gusto conducted a survey of 1,300 small business owners who launched their businesses last year to better understand their characteristics.
The study revealed that women accounted for 49% of new business owners in 2023, marking an increase from previous years. However, women still face challenges in attracting investors compared to men. Only 3% of women entrepreneurs received private capital investments to start their businesses in 2023, while 9% of male entrepreneurs received investments. This suggests that there is still work to be done in addressing gender bias in the investment community.
Black entrepreneurs accounted for 6% of new business owners in 2023, doubling the rate seen before the pandemic. Hispanic entrepreneurs made up 13% of new owners, compared to 8% the previous year. Additionally, more businesses are being started as “side hustles,” with 44% of entrepreneurs launching new businesses in 2023 while working other jobs, up from 27% in 2022. This suggests that many entrepreneurs are using their businesses as a way to supplement their income from full-time or part-time jobs.
