June 7, 2024

Entrepreneurship Boom

Entrepreneurship Boom

Although inflation and high interest rates are challenging many of the businesses we serve, there is some good news for small and midsize firms. A new analysis released by TD Bank shows that small business formation rose at the highest rate of any period since 2004 from 2020 to 2023—with 2023 showing the highest percentage of business applications on record. And these businesses are creating jobs. Both “microbusinesses” with less than five employees and midsized businesses showed notable gains in employment.

In another piece of good news, women and minority-owned firms have made significant strides in increasing their representation among business owners. Almost half of new businesses started in 2023 were owned by women. Business ownership among Black Americans grew at the fastest pace in three decades in 2023. There was also significant growth among Hispanic entrepreneurs.

I enjoy seeing news like this because it is a powerful reminder of why we do what we do at Marcum, as a firm serving entrepreneurs. Entrepreneurship is clearly part of the American dream for a growing number of Americans, bringing freedom, opportunity, and an unparalleled means to build personal wealth. Not every new venture will succeed—sometimes it takes a founder several tries to launch a successful and profitable business—but there is no greater teacher than on-the-ground experience. Few pursuits are more rewarding than running a business that is doing a great job of serving its customers, team, and community.

While entrepreneurship isn’t for everyone, it is increasingly becoming an important life skill and, for many, a source of income or extra income. With the economy changing by the day because of innovations such as AI, barriers to starting a business are coming down, as new and easy-to-use technologies help founders get more done in less time and with less expense. Many workers will have opportunities to spot untapped niches in the marketplace and come up with ideas to fill them.

Meanwhile, entrepreneurship education keeps getting better and making business ownership accessible to more people. At one time, few MBA programs taught entrepreneurship. The argument was that “entrepreneurship can’t be taught.” However, we’ve seen in the past few decades that academic programs and accelerators can help people with little exposure to entrepreneurship discover latent talent. While few people are born with the entrepreneurial prowess of an Elon Musk, Sara Blakeley, or Oprah Winfrey, being a superstar isn’t always necessary for success. There is room for many types of business owners in the economy, from the self-employed business coach to the middle market CEO.

I’m looking forward to seeing the big-picture data on these businesses in the next decade. Today’s one-person startup could be tomorrow’s middle-market firm. We’ll be standing by, ready to serve as a trusted advisor.

In the meantime, I hope you have a chance this weekend to enjoy the beautiful June weather that has finally arrived. Happy Friday, everyone!