Business Creation in the United States

Whether it’s a small company selling artisanal soaps or a multinational corporation building skyscrapers, starting and running a business requires an investment. Entrepreneurs may use their own funds or seek outside investors, known as venture capitalists, who will provide the money in exchange for a percentage of ownership.

Once an idea for a business is conceived, the entrepreneur must then create a business plan to map out how the enterprise will be structured and run. This document is essential for convincing investors and partners that the business is a sound financial proposition. It is also used to guide the entrepreneur’s day-to-day decisions and will help them avoid legal complications.

Entrepreneurship is fundamental to a healthy economy. Companies less than five years old employ nearly half of the nation’s workers and are responsible for 61% of net job creation. Yet, the United States lacks a startup visa that would allow immigrant entrepreneurs with proven ideas and solid investments to pursue their dreams in America.

Prior to the COVID-19 pandemic, new (employer) business creation in the United States was on a steady decline for four decades. The surge of business applications during 2021, as captured by Business Dynamics Statistics (BDS), suggests that this downward trend is reversing. However, it remains to be seen whether the higher rate of new employer businesses in 2021 is a blip or is a lasting increase in the propensity to start firms. If the latter is true, then we can expect a surge in employment from these high-propensity firms in the future.