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Fewer new businesses formed in 2012 as nation deals with economy

Job creation has been a hot-button topic for several years as the nation’s economy has been an issue. Commentators say that small businesses are important in job creation. Obviously, a startup business faces a wide variety of issues that includes the potential for job creation as only one aspect of the business.

Many entrepreneurs seek to form a new business based upon a concept, and it is important for a new business owner to consider many legal issues from the beginning to help the business down the road.

While the nation looks for new job creation to help spur the economy, research indicates that some entrepreneurs may be sitting on the sidelines. A report from the Kaufmann Foundation says that last year, the number of people forming a new business slid slightly—the second year in a row that the economy saw a slight decrease in the number of American entrepreneurs who decided to form a new business.

The recent study says that last year. 0.30 percent of adults were involved in a new business, a fractional drop from the 0.32 percent of American adults who were involved in forming a new startup company the previous year. However, the researcher says that the number of adults engaged in new businesses last year remained at more than a-half million adults.

Some commentators say that a drop in the unemployment rate last year may be linked to the drop in new business formation. The study says that the drop in new business creation occurred primarily among men, and not among female entrepreneurs. The author of the Kauffman Foundation study says that it appears that a drop in unemployment among male adults “suggests that men were getting jobs so they didn't feel the pressure to start businesses as a last resort," according to the Dayton Business Journal. 

Source: Dayton Business Journal, “Startup fever cools among men as U.S. economy improves," Kent Hoover, April 17, 2013

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