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Business Formation Statistics

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About the Data

Purpose:

The BFS measure business initiation activity and the cycle from initiation to realized business formation. The BFS gives an early look at business formation activity within the U.S. at a detailed state level and regional level.


Coverage:

The BFS data cover Employer Identification Number (EIN) applications made in the United States, including those associated with starting a new employer business. EINs are IDs used by business entities for tax purposes. In addition, the BFS also provide information on actual and projected employer business formations originating from the EIN applications. Data are available as both nationwide and individual states' statistics.


Content:

The BFS provide timely and high frequency data on:

  • Business applications as indicated by applications for an EIN
  • Actual and projected business formations originating from business applications based on the record of first payroll tax liability for an EIN
  • Delay in business formation as indicated by the average duration between business application and business formation

Technical documentation for these experimental statistics and specific recommendations for interpreting these statistics are described on the How the Data are Collected Tab. The Census Bureau invites users to provide feedback on how to improve this experimental product.


Frequency:

The Quarterly BFS data cover the period starting from the third quarter of 2004 (2004q3) at a quarterly frequency. Quarterly BFS data are released approximately 2 weeks after the end of the observed quarter. The Weekly BFS data start from week 1 of 2006 at a weekly frequency. Weekly BFS data are released approximately 5 days after week's end.


Products:

The Business Application Series, available on both a weekly and quarterly basis, contains 4 filtered series of EIN applications, measuring selected groupings based on a variety of factors.

  • Business Applications (BA): The core business applications series that corresponds to a subset of all EIN applications. BA includes all applications for an EIN, except for applications for tax liens, estates, trusts, or certain financial filings, applications with no state-county geocodes, applications from certain agricultural, public entities, and applications in certain industries (e.g. private households, civic and social organizations)
  • High-Propensity Business Applications (HBA): A subset of BA that contains all applications with a high-propensity of turning into a business with a payroll, based on various factors
  • Business Applications with Planned Wages (WBA): A subset of HBA that contains all applications that indicate a planned date for paying wages
  • Business Applications from Corporations (CBA): A subset of HBA that contains all applications that come from a corporation or a personal service corporation


The Business Formation Series, available only on a quarterly basis, measures new employer firm births, the point when an application is realized and a business begins to operate. The Business Formations Series is available in two subsets, measuring from application to realization of the business paying wages, within 4 and 8 quarters.

  • Business Formations within 4 Quarters (BF4Q): The number of employer businesses that originate from Business Applications within four quarters from the quarter of application
  • Projected Business Formations within 4 Quarters (PBF4Q): The projected number of employer businesses that originate from Business Applications within four quarters from the quarter of application
  • Spliced Business Formations within 4 Quarters (SBF4Q): Combines BF4Q and PBF4Q to provide the entire time series for the actual and projected business formations within four quarters
  • Business Formations within 8 Quarters (BF8Q): The number of employer businesses that originate from Business Applications (BA) within eight quarters from the quarter of application
  • Projected Business Formations within 8 Quarters (PBF8Q): The projected number of employer businesses that originate from Business Applications (BA) within eight quarters from the quarter of application
  • Spliced Business Formations within 8 Quarters (SBF8Q): Combines BF8Q and PBF8Q to provide the entire time series for the actual and projected business formations within eight quarters
  • Average Duration (in Quarters) from Business Application to Formation within 4 Quarters (DUR4Q): A measure of delay between business application and formation, conditional on business formation within four quarters
  • Average Duration (in Quarters) from Business Application for Formation within 8 Quarters (DUR8Q): A measure of delay between business application and formation, conditional on business formation within eight quarters

Uses:

The BFS can help businesses, policymakers, regional planners, and researchers assess the current state of early entrepreneurship at the national and state levels. The BFS uncover the trends in business applications and formations at previously unavailable levels of frequency, coverage, and timeliness. The data can be used to study a variety of issues in entrepreneurship, including, but not limited to, the high-frequency dynamics of entrepreneurial activity, the effects of business cycles on entrepreneurship, the effects of regional economic development policies on new business formation, the impact of state tax policies and regulations on business initiation, and the formation of new industrial clusters and agglomerations. A key benefit from these data are their timeliness and high frequency, which allow policymakers, analysts, and researchers to better monitor the state of entrepreneurial activity in the United States.


Disclosure Statement:

A disclosure of data occurs when an individual can use published statistical information to identify either an individual or firm that has provided information under a pledge of confidentiality. Disclosure limitation is the process used to protect the confidentiality of data provided by an individual or firm. Using disclosure limitation procedures, the Census Bureau modifies or removes the characteristics that put confidential information at risk for disclosure. Although it may appear that a table shows information about a specific individual or business, the Census Bureau has taken steps to disguise or suppress the original data while making sure the results are still useful. The techniques used by the Census Bureau to protect confidentiality in tabulations vary, depending on the type of data.

The Census Bureau has reviewed this data product for unauthorized disclosure of confidential information and has approved the disclosure avoidance practices applied. (Approval ID: CBDRB-FY20-115). The Census Bureau has reviewed the weekly data product for unauthorized disclosure of confidential information and has approved the disclosure avoidance practices applied. (Approval ID: CBDRB-FY20-214).



Source: U.S. Census Bureau | Business Formation Statistics | 301-763-2000 |  Last Revised: July 20, 2020