October Business Formation Report

January 17, 2025 1:05 pm

October saw a 0.8% bump in business formations from the previous month, with 425,295 new registrations, edging out last year’s numbers by 1%. But the real story was the shake-up in rankings—Florida surged from the bottom five to No. 1 after rebounding from a devastating hurricane season, while Mississippi, Oklahoma, and Washington made big leaps into the top 10. Colorado dipped slightly, likely due to rising costs and regulations, while Georgia clawed its way out of the bottom five. Meanwhile, Montana and Alaska tumbled after strong September performances. With strikes, supply chain issues, inflation, and election uncertainty in play, October was anything but steady. Our data comes from federal and state Corporations Division data and our own research, using rolling 12-month totals and year-over-year comparisons for October 2023 and 2024.

Location New Businesses Oct 2024 New Businesses Sept 2023 % Change Sept 2024 v. Oct 2024 New Businesses Oct 2023 % Change Oct 2023 v. Oct 2024 12 Month Avg. Nov 2023-Oct 2024
Alabama 2918 3789 -30% 4309 -32% 3945
Alaska 1021 935 18% 842 21% 983
Arizona 9626 10068 -5% 10272 -6% 10524
Arkansas 2917 2829 3% 3011 -3% 3043
California 33573 32496 3% 29879 12% 34589
Colorado 14208 13917 2% 13273 7% 13345
Connecticut 4273 4231 1% 4304 -1% 4267
Delaware 25750 24016 7% 24298 6% 24194
Florida 47722 48949 -3% 37420 28% 50696
Georgia 18459 17495 5% 19327 -4% 19233
Hawaii 2067 1869 10% 2007 3% 2069
Idaho 3166 3136 1% 3190 -1% 3338
Illinois 12273 11870 -13% 14163 -13% 12619
Indiana 7570 7236 4% 7186 5% 7684
Iowa 3423 3063 11% 2764 24% 3164
Kansas 2728 2267 17% 2470 10% 2673
Kentucky 4213 4194 0% 4380 -4% 4206
Louisiana 4742 4409 7% 4940 -4% 4896
Maine 1341 1371 -2% 1124 19% 1293
Maryland 5178 6797 -31% 7514 -31% 7179
Massachusetts 5520 5070 8% 5278 5% 5432
Michigan 6469 10473 -62% 11694 -45% 10918
Minnesota 5883 5544 6% 6501 -10% 6307
Mississippi 3707 3759 -1% 2371 56% 3630
Missouri 8082 7665 5% 7642 6% 8159
Montana 2445 4199 -72% 3963 -38% 4280
Nebraska 1854 1757 5% 1688 10% 1806
Nevada 5061 4798 5% 4632 9% 5072
New Hampshire 1579 1552 2% 1804 -12% 1722
New Jersey 13419 12802 5% 13114 2% 13337
New Mexico 3477 3484 0% 3463 0% 3554
New York 20370 19795 3% 22212 -8% 21253
North Carolina 13237 12452 6% 13223 0% 13409
North Dakota 635 659 -4% 801 -21% 697
Ohio 12134 11726 3% 11866 2% 12214
Oklahoma 5029 4728 6% 3993 26% 3906
Oregon 5342 5029 6% 5038 6% 5257
Pennsylvania 11357 10971 3% 10737 6% 11296
Rhode Island 1050 1005 4% 989 6% 1075
South Carolina 7194 6625 8% 7173 0% 7352
South Dakota 1225 1242 -1% 1164 5% 1186
Tennessee 5955 5942 0% 5848 2% 6182
Texas 35319 32865 7% 32507 9% 34288
Utah 4432 4196 5% 6183 -28% 6029
Vermont 947 923 3% 645 47% 937
Virginia 10177 9881 3% 10518 -3% 10425
Washington 8343 7808 6% 7592 10% 8766
West Virginia 1479 1511 -2% 1563 -5% 1535
Wisconsin 5073 4676 8% 4924 3% 5089
Wymoning 11333 13764 -21% 13380 -15% 13605

The Highlights

In October 2024, national challenges brought unpredictability and high stakes for states, causing big upsets in business formation trends. Strikes across key industries disrupted supply chains, likely halting growth in some states while spurring surges in new formations where employees felt disenfranchised or driven to start their own ventures. The looming elections brought a mix of cautious optimism and hesitation, as businesses braced for potential regulatory changes or economic shake-ups. And ongoing supply chain issues and inflation strained people’s budgets, forcing entrepreneurs to pivot strategies to manage the rising costs. Meanwhile, drought and the threat of bird flu outbreaks raised concerns in agriculture and food production sectors, adding further hurdles for states heavily reliant on these industries. Together, these factors created a dramatic showdown, separating states with diverse, resilient economies from those unable to weather the onslaught.

States like Florida, California, Colorado, and Vermont clearly benefited from their robust tourism and entertainment sectors, but others, like Oklahoma, Iowa, and Mississippi powered through thanks to grit and consistency in the face of environmental challenges. These states’ investments in diverse industries are undoubtedly enabling them to tackle challenges head-on and maintain their momentum. Florida in particular made a stunning comeback, climbing dramatically after a tough summer, likely buoyed by its resilience in hurricane recovery, tax advantages, and a reinvigorated tourist season. Iowa and Oklahoma also stand out—Iowa’s rise appears tied to lower corporate taxes and a focus on rural development, while Oklahoma’s growth seems linked to an influx of remote workers drawn by its lower cost of living. Meanwhile, top performers like Texas, California, and Delaware continue to hold steady in the top 10, showing no signs of slipping up anytime soon.

Several states saw significant drops in rank this October, with Utah, Alabama, Maryland, Montana, and Michigan landing in the bottom five for business formations. Utah and Montana may simply be cooling off after strong performances earlier in the year—Utah has now spent two consecutive months at the bottom, while Montana faces its first downturn after a strong rise in activity. Maryland’s efforts to modernize its tax code could have temporarily slowed filings as entrepreneurs took a beat to understand potential changes. Despite low living and business costs, workforce shortages, rising expenses, and regional competition made it harder for these states to sustain momentum.

What’s clear from October’s shake-ups is that states thriving in the rankings are those that balance their playbooks. By diversifying economic arenas—especially investing in aerospace, defense, and logistics—while keeping tourism and hospitality industries strong, these states are positioning themselves for long-term success. It’s not just about excelling in one area; it’s about creating a dynamic, multi-industry ecosystem that can weather national challenges and keep businesses in the game.