Business creation is a crucial part of the economic cycle. A new firm spawns employment, drives innovation, and provides opportunity for those who wish to make a contribution. But, despite the many benefits of creating your own company, starting one is not without risk. This guide will help you understand the steps involved, and how to best manage them as you take on the challenge of launching your own startup.
In 2021, nearly 5.4 million applications were filed to start a new business based on data from the Census Bureau’s Business Formation Statistics (BFS). This is the highest number of such applications on record, and a marked contrast with pre-pandemic trends, when such intentions had declined. Moreover, the 2021 surge was broad-based with increases across all major industry sectors—though the largest percentage gains were in transportation and warehousing; retail trade; accommodation and food services; and administrative and support services.
While a good deal of research has provided important new information about market economies—particularly entrepreneurship as a source of growth and adaptation—there remains considerable work to be done in understanding the dynamics of business creation. This article outlines a framework for examining the process and some key issues that should be addressed in future studies. This framework can help scholars interested in the dynamism of business creation, as well as policy analysts who focus on programs and policies to encourage such activity. Ultimately, a deep understanding of the nuances of business creation can help to drive an economy toward recovery and long-term sustainability.
