Business Formation Report | November 2025

Key Takeaways

• Business formations are still outpacing 2024—November rose 22% year over year.
• Washington, D.C. fell 19% from October, a drop likely tied to the federal shutdown’s immediate ripple effects.
• During the federal shutdown, business owners we surveyed reported delaying hiring and expansions.

Shutdown Impact: A Short, Shallow Dip

Twenty-nine states show reduced November formations, which aligns with the federal government’s extended shutdown. About half of the business owners we surveyed paused hiring or contractor work, while roughly a third reported higher uncertainty or postponed major decisions and launches.

Even so, the drag on formations was limited. Filings dipped only modestly from October as founders kept moving in the wake of the shutdown.

Non-Election Year Surge

Formations are up 22% versus last November. Some of that lift may be a rebound from election-year “wait and see” behavior, when policy uncertainty delays filings. However, that correlation may not mean causation, and the overall trend looks strong on its own.

Business Owners Are Optimistic, But Conservative

Most owners we surveyed in November are optimistic about the next 12 months. In the wake of the federal shutdown, many are taking a careful posture, deferring bigger bets like hiring or expansion, but new formations and core operations are still moving forward.