# High-propensity business application

A new business application the Census expects to become an employer.

The formation series counts applications for an employer identification number, and most of them never hire anybody. The high-propensity subset is the half worth reading as a signal about competition and about the supply of businesses to buy. The Census Bureau identifies it from characteristics on the IRS form associated with a high rate of business formation, among them that the applicant is a corporation. It also publishes the average number of quarters between an application and the business actually forming. So a spike in applications in a trade is not a spike in competitors, and the series measures the gap instead of leaving it to guesswork.

In numbers: A trade files 1,000 applications in a quarter and 300 of them are high-propensity. The 700 are mostly sole traders and side ventures; the 300 are the ones that may hire, and the series says how many quarters pass before they do.

Source: https://searchspheresource.com/glossary/high-propensity-business-application