Report shows a decrease in new business start-ups

According to a report by the U.S. Census Bureau, new business start-ups decreased to a record low in 2010. The percentage of businesses that were new organizations was below eight percent according to this recent report. The new business rate had peaked back in the 1980s, but has been decreasing ever since — especially since the recession.

The decline in new business start-ups in Michigan and throughout the United States wreaks havoc on the economy because of the lack of employment resulting in the recession continuing. In fact, a study shows that there were 2.3 million jobs created in 2010 because of 394,000 new business start-ups. At the time, this was critical because of the 1.8 million jobs that had been lost within the private sector.

The study also goes on to report that younger firms that are no more than five years old do not even account for 35 percent of businesses. In the early 1980s, this number was almost 50 percent. The creation of new jobs from new business start-ups was over 40 percent back in the 1980s, but it is only approximately 30 percent today. Some states saw the decline in new businesses more than others, but it was present in all states.

Starting a business, especially from scratch, can be a somewhat difficult and tedious project. That being said, many individuals in Michigan may feel threatened and insecure to start a new business. However, what one should realize is that there are plenty of options available to someone that is looking to start a business and it may benefit them to explore those options so that a business can get started on the right track.

Source: Business Week, ” Report: Rate of business startups falling ,” May 3, 2012