Digging into the numbers is kind of my thing. So when "record business formation" hit the headlines this month, I went looking for the number underneath it. Last month, Americans filed 531,423 new-business applications — the highest June on record, up 15.6% from a year ago. Every headline says entrepreneurship is booming. For searchers, it looks like that number is mostly noise. Here's why — and the one part that actually matters for where you look. The thing is, most new "businesses" will never be buyable. Census tracks a subset it calls high-propensity applications — the ones likely to actually hire employees and run payroll. That's your future deal supply. Everything else is freelancers and single-member LLCs that will never have a second employee, let alone a sale price. The gap is stark: Total applications grew 15.6%. But high-propensity grew just 5%. Fewer than 3 in 10 filings were even on the employer track — the lowest June share on record. Then most of those won't survive: only about half of new businesses make it 5 years, a third make it 10. So the "boom" is real, but the slice that becomes a business you could buy is small and may be getting smaller. So which sectors are forming or rotating? This is the useful part. The employer pipeline isn't shrinking evenly — it's moving. High-propensity applications by sector, vs. a year ago: Growing: Accommodation & Food +17.5% Construction +12.8% Retail +9.9% Professional & Technical +9.1% Health Care +7.0% Shrinking: Finance & Insurance −30.9% Transportation & Warehousing −16.4% Wholesale −12.1% Admin & Support −10.9% Manufacturing −8.6% What it means for your search Formation is a leading indicator — it won't change what's listed this quarter, but it tells you which markets are replenishing and which are drying up. Meanwhile, the exit wave is already here: boomers own ~12 million U.S. businesses, and roughly a million are expected to actually sell over the next decade. Fewer than 1 in 3 owners has a succession plan. Put them together: Searching in food service, construction, or health care? Owners are retiring and a healthy pipeline is forming behind them. Both work in your favor. Searching in finance, wholesale, manufacturing, or logistics? Plenty of sellers today — but thinner supply forming behind them, which means fewer quality targets and more competition down the road. Searchers — does this match what you're seeing on the ground? I'm especially curious whether those of you hunting in finance, logistics, or manufacturing are feeling the thinner pipeline yet, or if it hasn't hit deal flow at your end. redacted ---------- Source: U.S. Census Bureau, Business Formation Statistics, Juneredactedsector figures not seasonally adjusted; smaller sectors swing more on modest absolute changes); survival rates per BLS; ownership-transfer estimates per McKinsey.