Business Formation Report | June 2025

Key Takeaways

• Business formations were up 14% nationwide compared to June of last year.
• Wyoming, North Dakota, and Kentucky each more than doubled business formations compared to this time last year.
• California, Colorado, Texas, Delaware, and Florida also saw significant growth.
• Business formation data is drawn from state-level filings, cross-referenced against U.S. Census Bureau data.
• In interviews with our clients, business owners reported feeling optimistic about the health of their businesses.

Business formation data is drawn from state-level filings, cross-referenced against U.S. Census Bureau data. Learn more.

Typical Summer Slowdown, Atypical Numbers

Business formations tend to dip in the summer, and this year is no different. New business formations nationwide continued to decline, this month by 4%. However, while formations are following an established trend, they’re doing so at a much higher rate than last year. U.S. business formations are up 14% compared to this time last year.

WY, ND, and KY More Than Double Formations

In Wyoming, new business formations more than doubled compared to this time last year (56%), continuing an upward trend. No doubt privacy protections and a business-friendly regulatory environment continue to encourage people to form entities in the Cowboy State.

But what is driving growth in Kentucky (up 58%) and North Dakota (up 77%) is less clear. Earlier this year, Trump signed executive orders lifting regulatory burdens on both coal mining and drilling. Are entrepreneurs laying the groundwork for a boom in extractive industries?

Colorado Sends Mixed Signals

California, Texas, Florida, Delaware, and Colorado all continued to show strong growth. Of these typically high-volume states, Colorado showed the biggest jump at 34%. This comes despite the latest University of Colorado’s Leeds Business Confidence Index indicating that confidence remains low among business owners in Colorado. While it can be tough to reconcile a 34% jump in formations with low confidence, one theory is that Coloradans are starting side ventures to supplement income as they feel the financial pressure caused by tariffs and inflation.

Cautious Optimism Prevails Among Small Business Owners

An overwhelming majority (74%) of business owners we surveyed said they felt “very optimistic” about the health of their business, but about half said they had no plans to hire employees in this next six months. The gist: business owners are holding steady.

Inflation Seen as the Biggest Threat

Business owners nationwide identified inflation and rising costs as the biggest threat to small businesses. Inflation far surpassed fears of difficulty accessing capital, consumer demand decline, labor shortages, political instability and regulatory pressure. Indeed, the Consumer Price Index went up 2.4% year over year in May, according to the Bureau of Labor Statistics, continuing a steady upward trend. Business owners in the Northeast seem to be feeling the pressure of inflation the most (42%).