This story appears in the
February 2005 issue of
Entrepreneur.
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Though it seems business is finally emerging from the doom and
gloom of the economic downturn, a recent study by InfoUSA, an Omaha,
Nebraska, firm that collects business data as part of its database
marketing services and sales solutions, found that in 2003, the
number of businesses 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 economy 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 business growth in states such as Arizona, Delaware, Florida and
Nevada. "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."