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Business start up trends show tough road for new entities

Each year new businesses across diverse industries pop up all over New Jersey. From restaurants to shops and firms to corporations, new entities try to make their way into competitive markets to become successful and established businesses. Unfortunately, many new businesses do not find solid support in their first years of operation and close their doors only after short periods of time.

According to data published by the Bureau of Labor Statistics, recent years have been some of the toughest for new American businesses. For example, in 2010 just over 500,000 new businesses were opened around the nation. In 2006, more than 650,000 had opened at the same point in that year.

New businesses are not opening with as much frequency as they did in the past and they are also not creating jobs as much as they did in the prior decade. In 1994, 4.1 million jobs were created from new business openings while in 2010 that number had dropped to only 2.5 million. The number of successful new business start ups as well as the number of jobs those start ups have offered to the American workforce have steadily decreased over the last 10 to 15 years.

Though new business formation has dropped off from recent years, the overall success of new businesses beyond their first years of operation has remained relatively consistent over time. After two years in operation around 80 percent of new businesses still have their doors open; that figure drops to around 50 percent at the 5 year mark. Only around a third of new businesses survive long enough to see 10 years of successful operations.

The data provided by the Bureau of Labor Statistics provide a clear picture of how hard it is for new businesses to make it. Anyone who is considering starting his own entity may choose to work with business formation professionals. Starting a business on its most solid footing can be a good way to find future success in the competitive small business market.

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