Colorado entrepreneurs who are interested in starting their own businesses should be aware of the results of a report that has been released by the Economic Innovation Group. It showed that in 2014, the most recent year with available data, there were more company closures that startups in two-thirds of all metropolitan areas around the country.
The number of startups had surpassed that of business closures every year for decades even during slow periods. However, the economic downturn in 2008 caused these figures to reverse. While it’s normal for recessions to slow the growth of new businesses, recovery from the last one has been especially weak. For example, the report reveals that in 2014, there were still 182,000 fewer businesses than in 2007. This decrease in the formation of new enterprises has led to a phenomenon where more Americans than ever before are working for established companies.
Areas of the country with startup rates that exceeded the national average in 2014 were concentrated mostly in a few areas. The metro areas of Austin, Texas, and Provo-Orem, Utah, boasted the highest number of new businesses compared to closings. The figures for Denver showed that 1.3 percent more companies were created than closed in 2014. Smaller industrial towns in the Midwest had the lowest startup rates, with Lake Havasu City, Arizona, and Cape Girardeau, Missouri, ranking as the areas with the highest number of business closings.
Opening a business is a complex process, and while it can be exciting, there are obviously risks. People who are thinking about doing so may want to have the assistance of a business law attorney from the outset. One of the first decisions to be made will be the choice of legal entity that the business will operate under, and an attorney can outline the alternatives.