Georgia entrepreneurs may be interested in a new study that examined the trends in small businesses from 1978 to 2011. According to the study, the number of small companies is down across the country. Small business formation is unable to keep pace with the amount of establishments going under.
The last three years included in the study showed a downturn in the amount of companies. Across the country, the formation of new ventures has dropped approximately 47.2 percent. Existing businesses are being more conservative and fewer employees are leaving their jobs.
Medium size companies seem to be doing better and were able to adapt to the economic changes of the recent past. The state of Ohio is attempting to figure out if studying these medium size operations to see if it could help revitalize the small business community. Ohio conducted its own study similar to this one and discovered that the decline of new establishments there is 47.9 percent. The national study showed New York had the lowest percentage at 18 percent, and Alaska was the highest at 61 percent.
Many people across the country and here in Georgia still believe that small businesses are the backbone of this country. As the economy continues to recover, the trend suggested by the study could reverse itself over time and small business formation could rebound. Entrepreneurs that are willing to take the plunge and start a new venture may benefit from being more cautious and doing some research. Vetting as many of the business and legal issues as possible could help ensure the success of a new venture.
Source: dispatch.com, “Business startups down after recession“, Tim Feran, May 11, 2014