Indianapolis sees high new business activity
Indianapolis seems to be a good place for new businesses lately.
Driving the news: 500 new businesses were registered on Yelp across the Indianapolis metro area in July 2023, per the company, up 29% year over year.
- Among major U.S. metros, Indianapolis saw one of the largest increases in business openings during the first half of 2023 versus the same period in 2019, at about 77.5%.
Why it matters: New business openings are a good measure of economic sentiment — people generally don't take the risk of spinning up a new venture if they foresee economic peril ahead.
What they're saying: "A strong business climate is something we're definitely seeing," said Taylor Hughes, vice president of policy and strategy at the Indy Chamber. "Though there have been concerns about a recession, we haven't seen that in the way that some have predicted.
- "There's still a lot of investment and a lot of business happening in central Indiana."
The intrigue: Dan Drexler, director of the Central Indiana Small Business Development Center, said they're seeing a lot of people starting new businesses as a side gig, looking to bring in extra income as their wages fail to keep up with rising prices.
- Drexler said the center has worked with roughly 900 clients so far this year, helping them either start a business or scale up an existing small operation, and has another 160 waiting to meet with an adviser.
- "We're positioned really well for this growth, and I think we're going to continue seeing it," he said.
By the numbers: New listings of shops and services on Yelp are on track to beat 2022's all-time high, according to a recent company report.
- Nearly 484,000 new businesses popped up on the platform from January through July this year, compared with about 389,000 over the same time period last year.
- That's a roughly 25% increase year over year, and a 46% increase from the same period in 2019.
- Openings increased across every category, driven by hotels and travel (up 39% over 2022), home services (up 37%), auto (up 27%), event services (up 27%) and local services (up 23%).
Zoom out: California, Florida, Texas, New York and Georgia have seen the largest total number of new business openings so far this year.
Meanwhile, there have been more business openings from underrepresented communities every month compared with the same month last year.
- From January through July, LGBTQ-owned (+33%), Black-owned (+28%) and Latin-owned (+28%) businesses opened at a higher rate than the national average (+25%), and when compared with the same time period last year.
- Women-owned businesses saw an increase of 19% in openings, and Asian-owned businesses saw a 13% increase.
What to watch: How long economic optimism lasts, and whether momentum continues as banking conditions tighten for small businesses.
Of note: Yelp business openings refer to new business listings on the platform in a given time frame.
- Business owners or Yelp users can add listings.
- New business data may lag due to the time taken to report and verify openings, Yelp says.
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