Where Do You Stand?
Some say the new administration isn't exactly oozing with support for new start-ups; some say help is on the way. So what's the truth?
For the past six months, the nation has been on a financial roller coaster that has sent destructive tremors rolling throughout the economy. Consequently, small businesses have found it almost impossible to secure risky venture capital, and even bank loans have plummeted. Business bankruptcies are inching up, and unemployment is seesawing. In manufacturing alone, the Bureau of Labor Statistics reported a monthly loss of 124,000 jobs in May and a total of 675,000 positions gone since July 2000. And that's just one industry.
In the past, laid-off workers in a tight job market have turned to entrepreneurship, but according to the "Challenger Job Market Index," a quarterly survey released by Challenger Gray & Christmas Inc. in April 2000, only 8 percent of discharged managers and executives started their own businesses in the first quarter of 2001. This is in sharp contrast to past downturns, when start-up activity thrived. In the first quarter of 1991, for example, 18 percent of discharged managers and executives started businesses.
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