Photo Credit: PeopleImages.com – Yuri A / Shutterstock
If you’ve noticed a trend of coworkers leaving their jobs to start their own companies, you’re not alone. Business ownership among younger Americans is on the rise, especially in certain parts of the country.
Traditionally, older Americans have been more likely to own businesses, thanks to greater experience, financial resources, and professional networks. However, entrepreneurship is increasingly attracting younger Americans, who now view it as a viable career path. Although they may have less capital, younger adults often have fewer financial obligations—such as mortgages or family expenses—making it easier to take on the risks of starting a business. Additionally, their skills and interests tend to align well with new opportunities in the digital economy, which often require lower startup costs.
Over the past several years, economic and workforce shifts have fueled record-high levels of new business applications, reflecting a surge of entrepreneurial interest among younger workers. According to recent U.S. Census Bureau data, nearly three out of every 10 business owners nationwide are under 40, and just over 6% of workers under 40 now run their own businesses.
Rates of Business Ownership Among Young Adults
Business ownership for Americans under 40 is at a 20-year high
Source: Simply Business analysis of U.S. Census Bureau data | Image Credit: Simply Business
This rise in entrepreneurship among young Americans marks a reversal of trends seen throughout the early 2000s and following the Great Recession. From 2001 to 2015, the share of business owners under 40 declined from 30.7% to a low of 25.3%.
Part of the decrease was driven by the nation’s aging workforce. As older generations continued working longer, younger workers naturally accounted for a smaller share of business owners, even as their overall numbers remained relatively stable.
Another factor at play was that business ownership among young adults has been especially sensitive to macroeconomic conditions. Leading up to the Great Recession, the share of workers under 40 who owned businesses rose, peaking at 6.4% in 2004 and 2005. However, as the economy slowed and entered recession, young business ownership rates fell, reaching a low of 5.2% by 2015.
Since 2015, however, both the share of business owners under 40 and the percentage of young workers who own businesses have risen sharply. In 2023, business owners under 40 comprised 29.3% of all owners, and 6.4% of young workers were business owners—the highest levels in approximately two decades. This resurgence aligns with economic growth, increased self-employment opportunities, and the rise of digital platforms that have lowered barriers to entrepreneurship, particularly for young people.
The Most Popular Industries for Young Business Owners
Business owners under 40 are highly concentrated in digital and creative fields
Source: Simply Business analysis of U.S. Census Bureau data | Image Credit: Simply Business
Since 2018, the percentage of business owners under 40 has increased across nearly every sector, with digital and creative fields remaining especially popular among younger entrepreneurs. In the information sector—which includes software development, digital publishing, and internet services—almost half (45.3%) of business owners are now under 40, up from 37.9% in 2018. Similarly, the arts, entertainment, and recreation industry saw young business ownership rise from 33.4% to 38.5%, highlighting the strong appeal of creative fields for younger workers.
In contrast, certain industries with higher barriers to entry—such as licensing requirements, significant startup capital, or large operating expenses—remain less common choices for young business owners. Fields like wholesale trade, finance and insurance, professional services, and health care have the lowest shares of owners under 40. In addition to high entry costs, these sectors tend to operate more traditionally, offering fewer opportunities for the flexible, online-driven work models that many young workers now favor.
Young Business Ownership by State & City
Young business owners are concentrated in parts of the Mountain West, Midwest, and South
Source: Simply Business analysis of U.S. Census Bureau data | Image Credit: Simply Business
Young business owners are heavily concentrated in the Mountain West, Midwest, and South, with states like Utah, North Dakota, and Wyoming leading the way. Utah tops the list, where 37.3% of business owners are under 40, followed by North Dakota at 35.1% and Wyoming at 34.4%. Oklahoma and Texas also rank highly, with 33.6% and 33.5% of business owners under 40, respectively.
Many of these states benefit from lower living costs and have seen recent increases in their young populations, creating favorable conditions for younger entrepreneurs. In contrast, the Northeast—with higher costs and fewer young workers—reports some of the nation’s lowest levels of young business ownership. The five states with the smallest share of business owners under 40 are all in New England.
This pattern is reflected in major metropolitan areas as well. Among large metro areas, Birmingham, AL, has the highest concentration of young business owners at 37.1%, followed by Fresno, CA (36.8%), and Austin, TX (36.4%). Other cities with high rates of young business ownership include Oklahoma City, OK, and Grand Rapids, MI, each at 35.2%. Conversely, major metros in the Northeast, including Hartford, CT; Washington, D.C.; Boston, MA; and Baltimore, MD, all report rates below 25%.
For young adults aiming to be their own boss, this report highlights the cities and sectors where their peers are finding success. Digital and creative industries, with lower barriers to entry, tend to attract more young entrepreneurs, while affordable cities—especially in the South—allow them to invest more in their businesses than in simply making ends meet. These insights reveal where young business owners are thriving and suggest where similar opportunities might exist.
This analysis was conducted by Simply Business—a small business insurance marketplace—using 2023 data from the American Community Survey. For complete results, see the original post: Cities With the Most Business Owners Under 40.
Methodology
Photo Credit: PeopleImages.com – Yuri A / Shutterstock
The data used in this analysis comes from the U.S. Census Bureau’s 2023 American Community Survey PUMS 1-Year Estimates. To determine the locations with the most young business owners, researchers at Simply Business calculated the share of all adult business owners who are under 40 years old. In the event of a tie, the location with the larger total number of business owners under 40 was ranked higher. For relevance and improved comparability across geographies, individuals who did not work or report income in the past 12 months were excluded from the analysis. Additionally, metropolitan areas were grouped into the following cohorts by population size: small (less than 350,000), midsize (350,000–1,000,000), and large (more than 1,000,000).
For complete results, see Cities With the Most Business Owners Under 40 on Simply Business.
