Few New Businesses Started in 2010

I just read a rather depressing piece of information: for the first half of 2010 the rate of new business start-ups was the lowest it's been in 24 years.  According to a blog post for the Wall Street Journal "the 3.4% first-quarter start-up rate and the 3.9% in the second quarter mark the lowest first-half since (executive coaching firm Challenger, Gray & Christmas) started recording data in 1986."  The reason for such a dramatic decrease from last year is less than obvious:

“It is difficult to pinpoint the exact reason behind the decline in start-up activity among former managers and executives,” Challenger Chief Executive John Challenger said in a statement Monday. “On one hand, it could be that the job market has improved to the point that many do not feel compelled to take the risk of going it alone. Then there is the fragility of the recovery and the uncertainty that comes with it. Many small business owners are increasingly pessimistic about business conditions and still find it difficult to get a loan.”

The silver lining for this is the increase in payroll workers over last year, but it's still hardly encouraging news overall.  Be sure to click on the link below and read the full WSJ post for more details.

Small-Business Formations Decline