Slip-Slidin' Away?

Will a decline in businesses be a downer for entrepreneurs?
Magazine Contributor
2 min read

This story appears in the February 2005 issue of Entrepreneur. Subscribe »

Though it seems is finally emerging from the doom and gloom of the economic downturn, a recent study by InfoUSA, an , , firm that collects business data as part of its database services and sales solutions, found that in 2003, the number of decreased slightly after growing steadily for six years. According to InfoUSA, there were 12.79 million businesses in 2003, down from 12.84 million a year before.

Vinod Gupta, president of InfoUSA, attributed the slight decline to the overall economic downturn after 9/11. He explains that 2002 didn't see a huge dip in the number of businesses because it generally takes about six months to a year for businesses to exhaust all their resources and fail during a slump. As such, any upturn in business numbers should happen about six months to a year after the picks up.

Far from predicting a continued decline, Gupta expects the number of businesses to ramp up again in 2005 and beyond. "[The decline is] a temporary phenomenon," he says. "2004 may be a little flat, but going forward, I'm confident we'll see growth."

One reason for optimism: InfoUSA has recently seen indications of in states such as , Delaware, Florida and . "Ten years ago, there were roughly 10 million businesses," compared to well over 12 million today, says Gupta. "The entrepreneur should look at the glass as half-full . . . the economy is growing again."


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