Editor’s Note: This story originally appeared on Commodity.com.
Self-employed entrepreneurs account for 10% of all workers, according to 2020 data from the U.S. Census Bureau. But whether born out of necessity or desire, an increasing number of workers are taking the plunge and starting their own businesses in the wake of the COVID-19 pandemic.
After an initial drop in new business applications in early 2020, monthly business applications soared to record levels. The most recent data shows that applications remain significantly higher than they were a few years ago.
The recent escalation in new business formation is due to several factors. First, as many businesses cut back operations or shut their doors completely, a wave of newly-unemployed workers opened their own businesses in response.
Additionally, a combination of business closures, supply chain problems, and changing consumer preferences created space in the market for new types of businesses to enter. Quit rates also reached record levels in recent months, as many workers have been driven by the pandemic to reassess their careers and start something of their own.
In total, new business applications increased by nearly 25% in the first year of the pandemic. But nearly a third of all applications were concentrated in two sectors: retail trade and professional, scientific, and technical services.
To find the metropolitan areas with the most entrepreneurs, researchers at Commodity.com analyzed data from the U.S. Census Bureau. The researchers ranked metros according to the percentage of workers who are business owners.
Researchers also calculated the total number of business owners, the total number of new business applications in 2020, the median annual income for full-time business owners, and the median annual income for all full-time workers.
Here are the metropolitan areas with the most entrepreneurs.
15. Little Rock-North Little Rock-Conway, AR
Percentage of workers who are business owners: 11.3%
Total number of business owners: 36,315
Total number of new business applications in 2020: 11,132
Median annual income for full-time business owners: $45,000
Median annual income for all full-time workers: $48,000
14. Lancaster, PA
Percentage of workers who are business owners: 11.5%
Total number of business owners: 31,500
Total number of new business applications in 2020: 3,919
Median annual income for full-time business owners: $60,000
Median annual income for all full-time workers: $54,000
13. Lafayette, LA
Percentage of workers who are business owners: 11.7%
Total number of business owners: 27,264
Total number of new business applications in 2020: 7,620
Median annual income for full-time business owners: $50,000
Median annual income for all full-time workers: $48,000
12. Charleston-North Charleston, SC
Percentage of workers who are business owners: 11.8%
Total number of business owners: 47,614
Total number of new business applications in 2020: 14,359
Median annual income for full-time business owners: $65,000
Median annual income for all full-time workers: $50,000
11. Austin-Round Rock, TX
Percentage of workers who are business owners: 11.8%
Total number of business owners: 143,075
Total number of new business applications in 2020: 34,716
Median annual income for full-time business owners: $65,100
Median annual income for all full-time workers: $60,000
10. Oxnard-Thousand Oaks-Ventura, CA
Percentage of workers who are business owners: 12.1%
Total number of business owners: 47,947
Total number of new business applications in 2020: 6,898
Median annual income for full-time business owners: $70,000
Median annual income for all full-time workers: $60,200
9. Bridgeport-Stamford-Norwalk, CT
Percentage of workers who are business owners: 12.2%
Total number of business owners: 57,354
Total number of new business applications in 2020: 13,873
Median annual income for full-time business owners: $74,000
Median annual income for all full-time workers: $77,000
8. New Orleans-Metairie, LA
Percentage of workers who are business owners: 12.3%
Total number of business owners: 68,738
Total number of new business applications in 2020: 29,830
Median annual income for full-time business owners: $50,000
Median annual income for all full-time workers: $50,000
7. Los Angeles-Long Beach-Anaheim, CA
Percentage of workers who are business owners: 12.3%
Total number of business owners: 766,024
Total number of new business applications in 2020: 198,477
Median annual income for full-time business owners: $52,000
Median annual income for all full-time workers: $55,000
6. McAllen-Edinburg-Mission, TX
Percentage of workers who are business owners: 12.8%
Total number of business owners: 41,838
Total number of new business applications in 2020: 6,188
Median annual income for full-time business owners: $30,000
Median annual income for all full-time workers: $36,600
5. Cape Coral-Fort Myers, FL
Percentage of workers who are business owners: 12.8%
Total number of business owners: 44,029
Total number of new business applications in 2020: 13,000
Median annual income for full-time business owners: $55,000
Median annual income for all full-time workers: $45,000
4. Deltona-Daytona Beach-Ormond Beach, FL
Percentage of workers who are business owners: 13.0%
Total number of business owners: 35,668
Total number of new business applications in 2020: 10,271
Median annual income for full-time business owners: $51,000
Median annual income for all full-time workers: $45,000
3. Asheville, NC
Percentage of workers who are business owners: 13.4%
Total number of business owners: 31,283
Total number of new business applications in 2020: 4,810
Median annual income for full-time business owners: $42,250
Median annual income for all full-time workers: $42,250
2. Miami-Fort Lauderdale-West Palm Beach, FL
Percentage of workers who are business owners: 14.7%
Total number of business owners: 439,795
Total number of new business applications in 2020: 217,834
Median annual income for full-time business owners: $41,000
Median annual income for all full-time workers: $45,000
1. North Port-Sarasota-Bradenton, FL
Percentage of workers who are business owners: 16.4%
Total number of business owners: 56,259
Total number of new business applications in 2020: 13,328
Median annual income for full-time business owners: $50,000
Median annual income for all full-time workers: $52,000
Methodology
To find the metropolitan areas with the most entrepreneurs, researchers at Commodity.com analyzed data from the U.S. Census Bureau’s 2020 American Community Survey Public Use Microdata Sample and Business Formation Statistics. The researchers ranked metros according to the percentage of workers who are business owners. In the event of a tie, the metro with the larger total number of business owners was ranked higher.
Researchers also calculated the total number of new business applications in 2020, median annual income for full-time business owners, and median annual income for all full-time workers.
Business owners are defined as self-employed workers who have their own incorporated or unincorporated businesses. Only the 100 most populous metro areas were included in the analysis.
Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.
