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Maryland’s Business Creation & Survival Challenge: We’re Falling Behind
Sep 10, 2025
Maryland’s Business Creation & Survival Challenge: Key Takeaways
- Formation Slowdown: New business applications fell 6% in 2024 (152,999 vs. 163,516 in 2023), ranking 9th per capita nationally. Competitors like Delaware and Wyoming are far ahead.
- Survival Gap: Small business survival dropped from 19% to 12%, one of the steepest regional declines. Neighboring states outperform Maryland in survival, net growth, and jobs per new business.
- Jobs per Business Collapsing: Maryland’s metric dropped from 2.11 to 0.76 (35th nationally), limiting wages, opportunities, and tax revenue.
- Net Growth Shrinking: Only +2,281 net new businesses were added in 2024, a 43% decline from 2023.
- Monthly Momentum Negative: Maryland lost ~877 applications per month versus 2023 — a sustained downward trend.
- Employer Intent Falling: Just 14% of applications were employer businesses, compared with 19% in Delaware, signaling fewer future job creators.
Maryland’s Business Creation & Survival Challenge: We Have the Solution — But We’re Failing to Let It Thrive
Picture This: Every month, hundreds of Maryland entrepreneurs dream of starting a business. Some never open their doors. Others launch but close within a year. Meanwhile, neighboring states like Delaware and Virginia are creating thriving businesses, good jobs and growing tax revenue — right as Maryland’s numbers slide.
The Reality: Maryland’s slow business formation, collapsing survival rates, and shrinking jobs-per-business mean fewer opportunities for residents, weaker wages, and lost tax revenue — roughly $100-$125 million annually. Every metric shows the same story: the state is falling behind.
The Opportunity: Entrepreneurs are here — they want to grow. With tax reforms, streamlined regulations, support for scaling businesses and incentives for job creation, Maryland can turn these trends around, add 20,000-25,000 jobs, and secure a stronger economic future.
The Numbers Tell the Story: In 2024, Maryland saw 152,999 new business applications, ranking 9th nationally per capita. But applications are trending down (-6% vs. 2023), and applications per capita (0.02) lag far behind top-performing states like Delaware and Wyoming. This decline should alarm every policymaker: fewer applications today mean fewer jobs and less revenue tomorrow.
Table 1: Business Formation – Applications & Per Capita Rank
| Md | Va | Pa | De | WV | Best (2024) | |
| 2023 Applications | 163,516 | 188,039 | 219,085 | 77,240 | 22,196 | Wyoming (0.13 pc) |
| 2023 Applications per Capita | 0.03 | 0.02 | 0.02 | 0.07 | 0.01 | 0.13 |
| 2023 Rank | 9 | 21 | 39 | 2 | 48 | 1 |
| 2024 Applications | 152,999 | 178,095 | 207,467 | 81,514 | 21,706 | Wyoming (0.13 pc) |
| 2024 Applications per Capita | 0.02 | 0.02 | 0.02 | 0.08 | 0.01 | 0.13 |
| 2024 Rank | 9 | 22 | 40 | 2 | 48 | 1 |
Takeaway: Maryland’s applications are slowing while competitors like Delaware maintain much higher per capita rates. If this trend continues, Maryland will fall even further behind in job creation and economic growth.
Small Business Base: Openings vs. Closings. Maryland’s small business openings outpaced closings by only +2,281 net new businesses in 2024, down 43% from +4,023 in 2023. Survival rates fell from 19% to 12%, one of the steepest declines in the region. Virginia and Delaware continue to outperform Maryland in survival, net growth and jobs per new business.
Table 2: Small Business Base – Openings, Closings & Survival Rates
| Md | Va | Pa | De | WV | Best (2024) | |
| 2023 Openings | 20,995 | 35,728 | 35,984 | 4,661 | 5,903 | Washington (41%) |
| 2023 Closings | 16,972 | 29,290 | 32,986 | 3,766 | 4,612 | |
| 2023 Net | +4,023 | +6,438 | +2,998 | +895 | +1,291 | |
| 2023 Survival Rate | 19% | 18% | 8% | 9% | 22% | |
| 2024 Openings | 19,289 | 33,983 | 34,248 | 4,580 | 6,745 | Washington (41%) |
| 2024 Closings | 17,008 | 30,684 | 32,610 | 3,753 | 4,802 | |
| 2024 Net | +2,281 | +3,299 | +1,638 | +827 | +1,943 | |
| 2024 Survival Rate | 12% | 10% | 5% | 18% | 29% |
Takeaway: Maryland’s small-business base is stagnating. Openings barely outpace closings, survival dropped from 19% to 12%, and net growth fell 43%. Neighboring states maintain stronger ecosystems for small businesses — proving that policy and climate matter. Without intervention, Maryland risks further economic erosion.
Table 3: Monthly Trends (Applications)
Applications are down month-to-month in Maryland (-877/month), continuing a two-year decline. The longer this pattern holds, the harder it will be to rebuild Maryland’s small business base and tax revenue stream.
| Md | Va | Pa | De | WV | Best | |
| 2023 Applications | 163,516 | 188,039 | 219,085 | 77,240 | 22,196 | Wyoming |
| 2023 Avg./Month | 13,626 | 15,669 | 18,257 | 6,436 | 1,849 | |
| 2024 Applications | 152,999 | 178,095 | 207,467 | 81,514 | 21,706 | Wyoming |
| 2024 Avg./Month | 12,749 | 14,841 | 17,289 | 6,793 | 1,809 |
Takeaway: Two consecutive years of decline prove this isn’t a blip — it’s a dangerous trend showing Maryland’s business climate is not competitive.
Table 4: High Propensity & Employer Applications
Employer-intent applications also fell to 14% (from 15% in 2023), lagging Delaware (19%) and Virginia (17%). These are critical indicators of job creation potential. This means that even when businesses start, they’re less likely to become employers.
| High Propensity % (2023) | High Propensity % (2024) | Employer Applications % (2023) | Employer Applications % (2024) | |
| Md | 26% | 35% | 15% | 14% |
| Va | 39% | 37% | 18% | 17% |
| De | 41% | 40% | 20% | 19% |
| WV | 35% | 34% | 14% | 13% |
Takeaway: Maryland is falling behind in both high-propensity and employer applications. Closing this gap is critical to boosting job creation and keeping talent and investment in-state.
Table 5: Jobs per Business Created
Maryland’s jobs-per-business metric fell from 2.11 to 0.76 (33rd → 35th nationally), a nearly two-thirds decline in one year. Neighboring states maintain far higher ratios, demonstrating that supportive policies directly translate into more jobs, stronger wages and economic growth.
| Jobs per Business (2023) | Rank (2023) | Jobs per Business (2024) | Rank (2024) | |
| Md | 2.11 | 33 | 0.76 | ↓ 35 |
| Va | 2.58 | 25 | 1.29 | 21 |
| De | 2.93 | 15 | 1.52 | 14 |
| WV | 1.98 | 36 | 1.43 | 19 |
Takeaway: Maryland’s declining jobs-per-business ratio underscores that our policy environment is failing to support scaling companies. Without reforms, this will continue to hinder economic growth and job creation.
Table 6: Cumulative Snapshot (2022–2024)
Multi-year trends confirm Maryland is falling behind regional and national peers. While Virginia, Delaware and top states improve survival, net growth and jobs per business, Maryland’s applications per capita, survival and jobs-per-business metrics remain flat or decline. Without policy changes, Maryland risks further erosion of jobs and revenue.
| Md ('22-'23) | Md ('22-'24) | Va | De | WV | Best | |
| Applications per Capita | 9 | ≡ 9 | 22 | 2 | 48 | Wyoming |
| Survival Rate | 30 | ↓ 18 | 27 | 7 | 2 | Washington (41%) |
| Jobs per Business | 33 | ↑ 35 | 21 | 14 | 19 | Texas, Florida |
Takeaway: Maryland’s cumulative performance shows stagnation in key areas — applications per capita remain flat, survival rates are declining and jobs per business have collapsed. Neighboring states continue to improve, demonstrating that policy and climate make a difference. Maryland risks losing talent, investment and economic momentum without immediate reforms.
Why This Matters: Jobs, Revenue and Momentum at Risk
Maryland’s small-business trends have real consequences for jobs, wages, and tax revenue:
- Jobs: Maryland leaves 20,000–25,000 jobs on the table each year versus Virginia and Delaware, based on slower business formation and collapsing jobs-per-business ratios.
- Revenue: Using a rough estimate of $5,000 per job in state tax revenue, this represents a $100-$125 million annual loss.
- Momentum: Weak small-business growth stifles wages, innovation, and future investment, making Maryland less attractive for entrepreneurs and talent.
Without reforms, Maryland cannot grow the economy, close the budget gap, or fund schools, roads and communities effectively.
Maryland’s Opportunity: Close the Gap
If Maryland matched Virginia’s survival and growth metrics, the state could add 20,000 jobs. Matching Delaware could add 25,000+ jobs and $125 million in tax revenue. Entrepreneurs are here — the key is a climate where they can thrive.
Solutions
- Make Maryland tax-competitive: Align business and personal taxes with top-performing states.
- Streamline regulations: Reduce red tape and speed permitting to let businesses grow faster.
- Support scaling businesses: Offer capital, mentoring, and workforce development to help entrepreneurs become job creators.
- Reward in-state job creation: Incentivize growth within Maryland rather than relocation.
The stakes are high: If we don’t act, Maryland will continue to fall behind, lose jobs and deepen its budget deficit. With reforms, we can unleash entrepreneurs, grow jobs, raise wages and secure the state’s economic future.
Join us in Fighting for a Better Path
The Maryland Chamber is the leading statewide voice on competitiveness and the most influential advocate for Maryland businesses. Thanks to the engagement of our members and business community in 2025, we achieved significant wins:
- Defeated 68 harmful bills that threatened jobs, operations, and business growth
- Stopped expansive B2B services taxes before they took hold
- Blocked unlimited liability legislation that would have increased costs and legal risk across every industry
- Reshaped costly building and energy mandates to reduce compliance burden
- Pushed back on local regulatory overreach that would create confusion and drive up costs
These victories came because businesses like yours stood up, advocated, and invested in Maryland's future.
Don’t Sit on the Sidelines: Your Voice Is Needed
Maryland’s economic future depends on the choices we make now. We need to send a clear message: businesses and workers have options, and we want Maryland to be the place they choose.
Here’s how you can help make that happen:
- Join the Maryland Chamber – Stand with 7,000+ businesses who stopped millions in new taxes in 2025. Get connected to lawmakers, receive early warnings on costly legislation, and benefit from proven advocacy that protects your bottom line.
- Contribute to the Maryland Chamber PAC – Fuel the fight against harmful legislation and ensure business voices are heard when it matters most.
- Sign Up to be a Maryland Business Advocate – Get alerts when action is needed and contact lawmakers to tell them how proposed policies will impact real businesses and jobs.
Sources
- U.S. Census Bureau – Business Formation Statistics (BFS): Used for new business application data, including high-propensity and employer business application categories.
- U.S. Small Business Administration (SBA): Used for small business opening/closing and survival data (2023–2024).
- U.S. Bureau of Labor Statistics (BLS): Jobs per business created derived using employment and establishment data.
- CNBC Top States for Business (2024): Referenced for competitiveness context and state rankings.
Methodology Notes:
- “Best” states in each table are used as a benchmark to illustrate the potential gains if Maryland improved to leading national levels.
- Survival rate = small business openings minus closings as a percent of openings (may vary slightly depending on SBA methodology).
- “Jobs per business” = net new jobs divided by net new businesses created, rounded to two decimals.
- Rankings are based on available national data for 2023 and 2024 unless otherwise noted.
- All per capita values are normalized using U.S. Census population estimates.
Limitations & Assumptions:
- Some 2024 data is preliminary or based on mid-year projections; final figures may shift slightly.
- Rankings and efficiency metrics rely on public data sources that use slightly different methodologies and timing (e.g., fiscal year vs. calendar year).
- Business applications do not always result in operational businesses; high-propensity and employer applications are the best available proxies for intent to hire or scale.
Date of Last Data Pull: July 30, 2025.
Why It Matters
These trends cost Maryland 20,000–25,000 potential jobs and $100–$125 million in tax revenue annually, while slowing innovation, wages and investment.
Bottom Line
Maryland’s small-business ecosystem is at risk, but targeted reforms can reverse declining trends, strengthen communities and secure a stronger economic future.
