Business formations were up 5.6% in March 2025 from the same time last year, and up 50% from 2019.
Nothing was going to stop Janell Borrero from starting her self-financed company, Money Pop in 2025, not even the Trump administration’s economic policies, which have stirred anxiety for business owners.
In fact, the current economic climate is even more impetus for Borrero to get to work on her product, which she plans to launch in November. Borrero hopes the app will help women entrepreneurs in the beauty space—whom she affectionately calls “her girls”— with their finances, especially those who can’t afford to pay for other financial services.
Increasingly, the women Borrero advises notice that clients have started spending less on getting their eyelashes done and are opting to do their own makeup at home—a worrying sign for them. “These girls are scared of the unknown, if there’s going to be a recession,” she said. “Many of the girls who get into the beauty industry don’t have business knowledge. So my job is to keep them going and make sure that they don’t quit their entrepreneurship because of what’s happening in the economy.”
Starting a business is risky in the best of times, so one might expect entrepreneurship to decline in this period of extreme uncertainty. So far though, that hasn’t been the case. New business formations have yet to show signs of decline so far in 2025, currently 5.6% higher than March 2024 and 50% higher than the same period in 2019, according to monthly census data.
“With rising economic uncertainty, we have yet to see any sort of related fall off in entrepreneurial activity,” said Kenan Fikri, senior fellow at Economic Innovation Group.
It’s too soon to say if this trend will continue. But the resilience is encouraging—as entrepreneurship benefits the economy by generating innovation, creating jobs, and improving productivity, research shows.
Other periods of economic uncertainty have shown that, even in turbulent times, the strength and resilience of entrepreneurship endure. For economist Fikri, the data is somewhat of a surprising result. He said steady business formations underpins the strength of the U.S. economy, but with consumer sentiment increasingly shaky, he would have expected to see a clearer decline in business applications.
But Nich Tremper, senior economist at Gusto, an HR platform for payroll and benefits, said entrepreneurship has shown surprising resilience in recent years — which he expects to continue.
“Why I love studying small businesses so much is that they continuously are able to find ways to be resilient and make it,” he said.
Entrepreneurship slumped for decades before the pandemic, worrying economists. But unexpectedly, it surged during the pandemic and has remained at high levels, as people mobilized around low-barrier-to-entry businesses that they could start from their homes. Since 2019, small businesses created 70% of new jobs in the United States, according to the U.S. Treasury.
As part of that resiliency, the scope of the demographics constituting who entrepreneurs are has broadened within the past five years. With the rise of remote work creating access to low-barrier-to-entry jobs during the pandemic, 69% more women have started businesses than in 2019, and AAPI, Black, and Latinx entrepreneurs have also made measurable gains, according to a 2025 report by Gusto.
But there are reasons to think entrepreneurship won’t fare as well during this period of rampant uncertainty. Businesses received economic stimulus from the government during the pandemic, and the country went to great lengths to preserve household economic security and financial stability, which incentivized entrepreneurship, according to Fikri. Similar support seems unlikely this time around.
The Trump administration’s policies could also threaten entrepreneurship. Federal workforce layoffs and uncertainty around tariffs could also lead to a cooler labor market, making starting a business seem riskier. Last month, TD security experts predicted that the chances of the economy falling into a recession could be as high as 50%, but have recently lowered their estimates to 35%.
“Right now, we’re staring down uncertainty but we don’t know what’s on the other side,” said economist Fikri.
Trump’s first presidency was also marked by major uncertainty, but the current administration has acted far more rapidly than it did during the first 100 days of his initial term, said Richard Seamans, professor at NYU Stern. “It just seems like they’ve come out of the gate, firing on all cylinders,” he said.
But partisanship could be one reason for the continued strength in business formations. Many Americans support Trump and his policies, which might make them more optimistic to start a business. It’s possible that startups could be concentrated among Trump supporters, but data does not yet show whether redder states have higher concentrations of business formations than blue ones.
“Starting a company is a bet, it’s a decision to put money and start work today, meaning that I expect it to work out in the future,” said Jorge Guzman, associate professor at the Management Division in Columbia Business School.
Trump’s tariffs and trade policies could also spur entrepreneurship, particularly by encouraging companies to establish operations in the U.S. “Trade policies could increase entrepreneurship and be bad for the economy at the same time,” said Guzman. “If you create very complex policies, new companies will emerge to meet those needs—but at the same time, the overall design of the system becomes less efficient.”
To further encourage entrepreneurship, policies the Trump administration could pursue include lowering the cost of capital for entrepreneurs while keeping inflation in check, enforcing antitrust laws effectively, and ensuring that small service businesses have access to SBA loans, according to Guzman.
Even for entrepreneurs who are feeling the brunt of Trump’s economic policies, starting a new business is still a better bet for some, rather than relying on unsteady job prospects.
Kevin McDonald, owner of K1 Freight in Birmingham, Alabama, ventured into business ownership for the first time in his life in March 2024. Now, he works as a freight broker who helps shippers and manufacturers find trucks to move products like steel beams and wooden trusses.
Changing tariff policies has caused the availability of freight to drop drastically, meaning that there are fewer customers for freight brokers to work with and more competition. McDonald said that his total sales have dropped 60% from the first year he started his business.
As a result, his plans for business expansion are on hold. For a new business owner, there’s no separation between his personal and business finances. With the cost of rent going up 20% in downtown metro- area Birmingham, he can’t afford to lease a new office space for a reasonable amount. While he intended to hire a new dispatcher and paperwork assistant, he said he can no longer afford it, as he hoped to have at least one year of their salary saved up before enlisting help.
Nevertheless, McDonald said that entrepreneurship is a huge risk either way—economic uncertainty or not. Even if he knew in 2024 how unstable the business landscape would become in 2025, he said he would still forge ahead with starting a new business.
“If I didn’t choose to build this company right now, I don’t think working as an employee somewhere else would be a safer option,” he said. “There’s not many jobs available and they’re not paying very well. I have confidence going forward, plus I don’t have much confidence in what I can go back to.”
