Slip-Slidin' Away? Will a decline in businesses be a downer for entrepreneurs?

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

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

Far from predicting a continued decline, Gupta expects thenumber 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'mconfident we'll see growth."