Small Business Boom: IRS Reports Record 5.4 Million Business Applications in 2021
In a remarkable turn of events, the Internal Revenue Service (IRS) has revealed that the year 2021 witnessed a historic surge in business applications, reaching an unprecedented 5.4 million applications. This staggering number marks an all-time high since the U.S. government began tracking this data in 2004. Additionally, 2020 stands as the second-highest year for new business applications.
The surge in business applications highlights the growing significance of small businesses in the United States, which now employ nearly half of the nation's workforce, according to a recent report from the Chamber of Commerce.
While the past few years have undoubtedly been banner years for small businesses, regional differences have played a significant role in their growth. A Chamber of Commerce report has identified the Midwest as the most business-friendly region in the country. Factors contributing to this status include a lower cost of living, a well-educated workforce, and regulations that favor businesses by reducing taxes and easing zoning restrictions.
However, the East and West coasts also have their allure, with California's Silicon Valley and Hollywood studios, New York's financial hub, and Massachusetts' prominence in aerospace, defense, and information technology industries. Interestingly, a few states, such as Delaware, Wyoming, and Nevada, offer the unique advantage of incorporating businesses within their borders without requiring a physical presence.
For more precise data analysis, parishes within states can offer valuable insights. AltLINE has leveraged Census Bureau data to identify the parishes in Louisiana with the highest concentration of small businesses in 2021, calculated as small establishments per 1,000 residents. Small establishments are classified as those with fewer than 500 employees. It's important to note that parishes with fewer than 1,000 residents and those without available population estimates were excluded from the analysis. Additionally, states allowing nonresidents to incorporate businesses may have a higher ratio of small businesses to residents due to this flexibility.
A closer examination of the leading counties in each state reveals intriguing trends. World-class vacation destinations consistently appear on these lists, indicating that tourists often seek to experience local life through small businesses like restaurants, bakeries, bars, and boutiques.
Although major cities house most of the nation's small businesses, rural areas also play a significant role. Small businesses in rural regions often enjoy stability, potentially due to strong support from local residents and less competition from large corporations.
Exploring the parishes in Louisiana with the highest concentration of small businesses can provide valuable insights and inspiration for budding entrepreneurs looking to make their mark in the business world.
This story features data reporting by Paxtyn Merten, writing by Annalise Mantz, and is part of a series utilizing data automation across 50 states.