February Business Formation Report

In February 2025, business formations across the states saw a 13% decrease compared to the previous month, with 442,100 new registrations in total. The year-over-year numbers were down 4% compared to February last year, with 18,943 fewer new businesses across the country. While January gave us a brief spike in new business formations, February saw numbers dip across much of the country. Most states posted lower formation totals this month, and most fell short of their February 2024 numbers. The slowdown comes at the same time as looming tariff concerns, trade tensions, severe winter storms, and the early impacts of federal budget cuts. With uncertainty mounting both at home and abroad, many entrepreneurs appear to be postponing—at least for now—on opening up shop. Still, Washington state had a particularly strong showing this month, boosted by small business grants and a new tax credit proposal aimed at easing the burden on investors. Our analysis is based on state and federal Corporations Division data, as well as our own research, comparing changes year over year from February 2024 to February 2025. Data is collected on a rolling basis and may be updated as additional information becomes available.