Start-Ups: Business Creating Takes Sharp Drop During Recession

wsj.com:

New companies will be crucial to the strength of any economic recovery. Businesses in their first 90 days of life accounted for 14% of hiring in the U.S. between 1993 and 2008, according to the Bureau of Labor Statistics.

But this recession is taking a particularly heavy toll on business creation, as sources of small-business funding dry up and would-be entrepreneurs become more risk-averse

Read the whole story: wsj.com

Comments

[TruelyFedUp]

This story would not exist in a resource based economy - all basics of life including our homes, education, food, medical would be a natural right of every citizen. Technology would be used to handle most of the work. City centers would be universities. People might work one day a week to help handle work not done by machinery. Government would be of the people via their input into a central database where their idea would be analyzed and added to the solutions that benefit society.

See www.thevenusproject.com for details.

Truly

[Ventoi]

If I owned a tiny store...
I would live over it.

The general store...
with the wood stove in the back corner...
and the comfortable chairs...

they left me back in time during one of the movies...
and I am not catching up very well.

(there will be no tunes from Pete's Dragon until I get my dream job)

[BorseGermany]

The disconnect between the problems facing main street and Washington keep widening. For the past year we've heard nothing but talk of regulation, but zero action. What a joke.

good articles... http://www.iamned.com

meanwhile, the stock market is surging and everyone is too busy to counting their money to show any initiative

[Ventoi]

Some of the places I've dreamed of working...

ballparks...
glitzy department stores...the kind with nice gloves and perfume and soft white men's shirts(like Bowrings)
at the ticket counter at a skating rink
in a Christmas shop
in a bookstore
in a flower store
not in a record store...the guy does that one...

a start-up
what was the one I created last night...?
the tin hat and drum store.

[RandVictims]

The fact is the New Deal created an ocean of small business and "Free Market" cheerleaders wiped them out.

It's in our face every minute, every day.

[KIVPossum]

In many areas of business start ups are a dead issue. With the big box stores it's almost impossible to make a profit in a small business. Who would be foolish enough to open a hardware, home improvement, book, or discount store today?

[JePense]

You're narrowing the term "start up" to just retail stores. There are so many more types of start ups out there - and the majority of new jobs come from small enterprises.

Think professional services: engineers, architects, web page designers, custom software programmers, internet security, bricks and mortar security, homemade bars of soap, in-home health care, etc.

Most goods and services can be marketed globally with the aid of Internet, international shipping, etc. so a good idea can enable a start up to really take off quickly...but for the globally-depressed economy.

[ImmanuelGoldstein]

You obviously have no understanding of the underlying problem. PEOPLE ARE OUT OF MONEY. PERIOD! Just like they don't have any money for retail binges, they don't have any money for those other services either.
Besides ever single example you have given consists of an area hit hard by the present predicament.
Engineers-If nobody is making anything who needs engineers?
Architects-Every conceivable sector of construction, residentia­l,business­, industrial etc. is massively overbuilt, who needs architects?
custom software programmers/wb designers/internet security-yeah boy that information superhighway is gonna produce millions of Java programing jobs any time now, NOT!
brick /mortar securtiy- low wage and hopelessly glutted by people sidelined from other sectors
Home health care-Again surprisingly low wage and glutted with those out of work from other sectors.
homemade bars of soap-This is so 1999. Who has the money for pricey hand made soap? Besides thats a retail product not a service.
And the problem with marketing internationally is that you are competing with countries where wages are so much lower. That's one reason all those internet 'tech' jobs are moving to overseas faster than the industrial jobs did.
And as you pointed out yourself we are facing a globally depressed economy. Which means that marketing globally is no answer either.

[Mildmannered]

until start-up formation increases (and its new hiring) we are not going to get out of this recession.

It seems that the federal stimulus is going to the big banks, the big insurance companies and the big auto companies. (And the big banks still are not lending)

Mr. President (and Mr. Vice-President) it is time to help Main Street.

[CarmanK]

Not just any businesses are good enough to restart the economy. I want greater scrutiny of foreigh companies and foreign companies come into the US and setting up. These companies are not paying good wages and they can import their workers from overseas. CIFUS is not doing its job in protecting our nation and our national security interests. Some foreighn companies wholly own our utility sources in some states. That is not acceptable. I keep thinking that foreign treaties keep shortchanging american workers and american assets. The last time there was a ruckus over CIFUS was the DuBai ports debacle. Who is minding the store???

[mtracy9]

At least we got rid of stormtroopers Bush and Cheney. This gang, supported by a clique of corporate looters, was pushing our economy into another Herbert Hoover style Great Depression.

[drymartini1]

I am a republican and I LOVE regulations.

I never met a regulation I disliked, ones that are IMPOSED UNIFORMLY over all companies in the industry, big and small :).

Regulations are good because they impose a higher burden on smaller companies than bigger companies (no matter what the big CEO's whine about). This gives birth to a "created barriers to entry".

so whats bad about regulation? I say bring it on.

with only one demand. It should be imposed on all industries in the sector, big and small alike :)

[ibsteve2u]

The burden of regulation would be uniform, if there wasn't so much effort put into describing some form of income or behavior as something else in order to gain a tax or business advantage.

Without the latter attempts to manipulate the system, any business - big or small - could just plug their results into a piece of software and they'd be done with it.

[aspelling]

Small vs. large
Money have positive feedback effect - the more money you have and the bigger the your company is the more relative leverage you can get on the marketplace.
Small company cannot afford expensive marketing campaigns or pay for lobby efforts. When you are large enough these expenses are not that big relatively to your operation costs. You have money to enforce patents, lawsuits, etc.
The same applies to the personal wealth. I have much more leverage then a cubicle slave, for example.

From my point of view the underlying reason for this economic failure was lack of anti-trust enforcements. Microsoft case is a good example when the case was hollowed out.
Without this enforcement a healthy negative feedback of capitalism and market forces fails and excesses pop up everywhere

[munki]

Innovation, price point and the market...

If you get these three formula together with, in case for retail...
location, location, location...

You got the deal!~

[hypnotoad72]

So where's the location?

Fuzzy glossy comments we all know. Without people having jobs to earn money to MAKE A MARKET with, the other elements to the equation also fail.

We need America to come alive again. THAT IS THE DEAL.

Sorry for my own fuzzy glossy comments.

[feltdizz]

how can americans COME ALIVE when they are DEAD in the WATER...

people are broke.

[DuganS1]

You certainly couldn't tell that small business hasn't been hiring from the birth/death adjustments to the monthly employment reports. According to that statistic, small business has been booming. Most of us that look at the statistics have found those statistical adjustments nothing more than absurd.

[joebaggadonuts]

Liars, Damned Liars, and Statisticians.

Sometimes you just have to go out and look at the world to know the truth. In my neighborhood there are more vacant store fronts than ever since I moved in, 4 years ago. These were small businesses, mostly, but some large ones too... Smith Barney and Meryl Lynch shops are also gone. Folks I know from where I used to live report small business hurting. Restaurants all over are obviously hurting too.

I'm not seeing a lot of new start up small businesses taking the places left by those exiting. One exception though; a store front for a national clothing chain took one of the store fronts that was closed.

[ImmanuelGoldstein]

hey there's another opportunity for brick and mortar security services! guarding boarded up storefronts! Only problem, is who's going to pay for it? And who in their right mind would?

[FoonTheElder]

The birth/death stats are pure fantasy. They even note that they are based on previous years and do not take into effect and major changes in economic direction. Although you would think that after two years of showing fantasy numbers, they would correct it at least a bit.

The show a net gain of over 1 million new jobs since February from new companies, less the number lost from companies that closed. It's just another way to make employment look better than it actually is. Every January they have a huge negative adjustment.

http://www.bls.gov/web/cesbd.htm

[WeeklyKos]

Starups suck anyway. 95% of them fail

good articles; http://www.iamned.com

ppl who do 9-5 work deserve more recognition rather than entreprenuers who make a living usually off scr3wing society in one way or another

[CrazedSurfer]

Go on and work your 9 to 5. I'll enjoy life.

[hypnotoad72]

We are the ones that keep businesses going, that's for sure...

Most small businesses are good, ran by good people. After a certain size, does the probability of unethical activity start to rise. Maybe the CEOs forgot what is incessantly taught in school and college, about ethics...

[BGDiNLV]

Stupid comment!!! My wife started and business partner formed a advertising company ,BECAUSE they lost their 9 to 5's. They sell advertising to small businesses and they see all the hardships small businesses are going thru. The reality of it is is that 85% of them would never work for some else again in their lives.


And the ppl whom deserve the recognition for the 9-5. Don't forget that the small business owners OWN THOSE BUSINESSES, so you can have your 9-5. CLUELESS REMARK!!!!

[WeeklyKos]

Amerika continues to be run by corporate interests

good articles; http://www.iamned.com

the worst thing is there's nothing we can do about it