Business Booms vs. Business Busts: Business Closings Surpass Business Openings in August 2024
Cleanlist reports that 14,104 new businesses opened in August 2024 in Canada. This number increased notably from July 2024, resulting in a 32.3% increase in new businesses month-over-month. Additionally, the number of new businesses opened this past August compared to last August (2023) decreased by a whopping 34.4%.
Regarding closed businesses in August 2024, we reported 17,333 closings, a major 52.9% increase month-over-month. If we compare the number of closed businesses in August 2024 to August 2023, we noticed a significant 23.3% increase year over year.
Why was there an Increase in Both New Business Openings and Closures?
The stark contrast between new business openings and closures in August 2024 can be attributed to several factors. The rise in new businesses from July 2024 could be due to the opportunities spurred by post-pandemic recovery efforts or emerging industries. However, the significant spike in closures tells a different story. The rise in closures year-over-year and month-over-month signals underlying challenges such as economic uncertainty, inflationary pressures, or supply chain disruptions that many businesses could struggle to navigate. This increase in closures and increase in new businesses month-over-month tells us that while people are eager to start new ventures, they are hesitant in this competitive and volatile market. The decreases in new business openings year-over-year, combined with the rise of closing businesses, suggest a more cautious approach among entrepreneurs.
Why New Business Start-ups Matter to You
New businesses are big spenders in several B2B categories including office supplies, technology (computers, software, etc.), credit cards and financial services, furniture and fixtures, marketing and advertising, office space, insurance (business insurance, liability insurance), legal, accounting, and other professional services, employment recruiting and advertising, employee benefit programs, travel and transportation, raw materials and inventory, equipment, training and staff development, website development services, internet and telecommunication services, office maintenance and cleaning.
Companies that supply these products and services have an opportunity to quickly establish relationships with new start-ups and become their go-to supplier as they expand and grow. Savvy marketers know this and are quick to engage with these businesses.
