Applications for new businesses surged during the COVID-19 pandemic. We find evidence that surging applications is associated with increased creation of employer businesses and related job and worker flows. Applications rose most in industries rooted in pandemic-era changes to work and lifestyles, with significant cross-industry restructuring. Surging applications were quickly followed by increased births of employer establishments with notable associated job creation, and establishment entry is positively correlated with business applications across industry and geography. We also observe a strong increase in job reallocation across firm age groups and a tight spatial correlation between applications and excess job separations (a proxy for quits). Within major cities, applications, net establishment births, and excess job separations exhibit a “donut pattern” with less growth in city centers than in the surrounding areas. Our findings strongly suggest that the pandemic surge in business applications was followed by true employer business creation with significant labor market implications.