Biz starts faltered in '90s But Dun & Bradstreet ignores

[jane520lin]

Business Journal Staff Reporter Has this decade proven a springtime for entrepreneurs, with new businesses covering the economy like a carpet of fresh, green grass? Not if you believe Dun & Bradstreet Corp. Numbers gathered wow power leveling, by the business information provider show business starts in both the United States and Colorado withered in the early 1990s and have never recovered to levels seen in the mid-1980s. Business starts in Colorado peaked in 1986 at 5,265, according to Dun & Bradstreet. wow power leveling, In 1995, the last full year available, new business numbers were at 3,086. Through the first nine months of 1996, they were 9.5 percent ahead of a similar period in 1995. That 42 percent drop contradicts anecdotal evidence of a widespread small-business expansion and points to a much wow gold,more anemic economic recovery than experienced a decade earlier. But experts offer a slightly different explanation saying that Dun & Bradstreet's database of 10 million established companies doesn't take into account a blossoming of home-based businesses in fast-growing states like Colorado. According to the Dun & Bradstreet report, Colorado's slide from the 1986 peak bottomed in 1990 at 2,446, ending four years of decline that flyff penya, included a 23.7 percent drop in business starts in 1988 to 3,751 and a 22.6 percent drop in 1989 to 2,902. The severe downturn in the local economy could explain the sharp drops and the following recovery why business starts continued to rise in Colorado until wow gold, 1994, where they appear to have hit a plateau at 3,000 to 3,500. That same basic pattern is repeated throughout the United States. Larry Wipf, an economist at Norwest Corp. in Minneapolis, said the high numbers in the mid-1980s don't surprise him, but the failure to rebound and surpass those earlier numbers in the 1990s does. Most economic counts rise over time despite the fluctuations of the business cycle, simply because the population and economy are growing. More people take jobs, more housing permits are pulled, prices wow gold, rise. Despite one of the strongest booms in population and jobs ever experienced by the state, business starts in Colorado are nowhere near what they were in 1985 and 1986. One explanation is that Dun & Bradstreet has failed to capture the heart of business growth in the 1990s. Dun & Bradstreet maintains a database of 10 million active businesses located in the United States. Every day it makes about 35,000 changes, recording births, deaths, name changes and buyouts. Most of the information is culled from requests for credit checks by vendors and others crossing a business' path, said Neil wow gold, Di Bernardo, assistant manager of public relations at Dun & Bradstreet. The company revamped its definition of business starts in 1985 to include service providers as well as more traditional companies. Any active business will eventually come to the company's attention and get added. Although Dun & Bradstreet doesn't claim to represent the entire universe of businesses out there, its numbers do show significant trends, Di Bernardo said. The National Federation of Independent Businesses in Washington, questioning the existing counts of startups, undertook its own in-depth study in 1995. What it archlord money, found were business starts four times greater than what was measured elsewhere. About 71 percent of those starts, however, were home-based businesses, said Cliff Waldman, research fellow with NFIB Education Foundation. "There is an undercounting out there. We counted the very small business activity out there that starts in people's houses," Waldman said. Bill Kendall, economist at Center for Business and Economic Forecasting at Regis University, calls the numbers surprising, but offers an interesting scenario. The early and mid-'80s weren't a good period economically for Colorado, thanks to the oil bust. But many of those displaced had the capital and expertise to start their own businesses. People who can't find jobs worth their while have a greater motivation to create their own job. John Hickenlooper, owner of the Wynkoop Brewing Co.flyff penya, is one example of those petroleum refugees who launched a successful second career as brewerand real estate investor; he played a key part in redeveloping lower downtown. The real estate and banking bust of the late 1980s had a different effect, choking off the resources people need to start business. Demographics could offer another explanation. The first wave of the baby boomers were at an age when many people break out on their own and downsizings gave them the push they needed. But Kendall counters that the 1990s rather than the 1980s would have shown the "boomer" effect on business starts if that were the case. The numbers from Dun & Bradstreet and NFIB raise other interest issues. Is a home-based business as likely to employ people in huge numbers and have as significant an impact on economic growth? Who wants employees opening the refrigerator and helping themselves to a glass of milk? Dun & Bradstreet numbers show that business startups in 1986 employed 33,482 people in Colorado. Those startups in 1995 employed only 12,723. The average number of employees per startup is declining. With large companies laying off and new business starts not especially strong, is it likely that the middle tier of companies job growth?
Biz starts faltered in '90s But Dun & Bradstreet ignores home-based firms

[Joepie]

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