As the economic expansion extends into one of the longest on record, a growing number of Tennesseans are starting their own businesses.
New business entity filings jumped by 14.3 percent this spring over last year — the highest quarterly gain on record — while the number of business dissolutions declined by 36.6 percent, according to a report Monday by the Tennessee Secretary of State.
The spring quarter was the 27th consecutive quarter of positive year-over-year growth in the number of businesses operating in Tennessee. As of June 1, there were 282,982 active entities in Tennessee, representing a 5.9 percent increase compared to the second quarter of 2017.
"This strong growth shows that Tennessee's economy continues to thrive," said Tennessee Secretary of State Tre Hargett. "Companies are continuing to choose Tennessee as a destination to do business because of the friendly business climate."
In Hamilton County initial business filings jumped by 11.5 percent over last year in the second quarter with 774 new businesses filing for state business licenses.
Lynn Chesnutt, executive director of the Tennessee Small Business Development Center, said the number of persons coming to the center asking for help in starting a business continues to grow.
"I think people see Chattanooga as a business-friendly community with a lot of resources to help startups, including our center, CoLab, SCORE and others," he said. "People feel like they can get help in starting a business here and others are willing and eager for them to succeed."
The stronger economy, which has grown steadily for more than eight years, also is giving more confidence about the potential for new ventures while many aging Baby Boomers are deciding to give up their previous careers and pursue their own businesses, Chesnutt said.
Dr. Bill Fox, director of the Center for Business and Economic Research, said such business starts "are a strong economic indicator" for the future since new business filings tend to indicate both economic confidence and investment and hiring plans by entrepreneurs.
"We view these numbers as a really strong indicator that the recovery remains very strong," Fox said. "Our sales tax growth rate at 4.6 percent (year over year ) also is very strong and it's hard to see much weakness in any of the Tennessee data."
Employment has grown in the past year in Tennessee at an annual rate of 1.9 percent and the jobless rate has dropped to 3.5 percent. Both of those employment indicators are stronger than in the United States as a whole.
"All the indicators are about as good as we could imagine," Fox said.
Contact Dave Flessner at firstname.lastname@example.org or at 757-6340