SF, California business creation spiked last year but lagged national rate
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New U.S. business applications hit a high-water mark in 2023, but California trailed the national average.
Why it matters: Small businesses are a cornerstone of the U.S. economy, employing tens of millions of Americans.
Driving the news: Americans filed nearly 5.5 million new business applications in 2023, per the U.S. Census Bureau, or about 16.3 for every 1,000 residents.
- California's rate of 14.3 applications for every 1,000 residents trailed the rest of the country by about 13%.
- Still, its rate is the highest since at least 2005, and it has more than doubled since 2009, during the depths of the Great Recession.
Zoom in: Small-business creation in San Francisco boomed with the highest rate of new applications in the state.
- Nearly 21 new business applications per 1,000 residents were filed in San Francisco County in 2023, totaling 17,676.
- That's up 3.3% from 2022, which recorded 17.5 per 1,000 residents.
By the numbers: The second-highest was Sacramento County, with a rate of 20.4, followed by Los Angeles County with 18.1, and Orange County with 15.5.
The intrigue: San Francisco heavily restricts chain stores or big-box retailers with 11 or more locations throughout the U.S. from opening in certain neighborhoods due to Proposition G, a 2007 ballot measure aimed at protecting mom-and-pop shops.
What we're watching: Colorado Secretary of State Jena Griswold recently told state lawmakers that fraudulent business filings have been increasing rapidly across the country in the years since the pandemic.
- Often, filings duplicate existing legitimate businesses in an attempt to use them as cover for fraudulent activity.
The bottom line: Filling out the paperwork for a new business is just one step, but it's at least a sign of confidence that small-business success is possible.
- Nearly 85% of consumers say they'll probably shop at a small business this holiday season, a new American Express survey finds, and that's up 11 points over the last decade.