COSTA MESA, Calif.,
June 4, 2015 /PRNewswire/
-- Experian®, the leading global information
services company, today announced that the number of businesses
started each year after the recession has decreased substantially —
nearly 45 percent (44.7 percent). According to an Experian analysis
on business start-ups, in 2010 29.1 percent of all small businesses
were newly formed, while in 2014 just 16.1 percent were
start-ups.
"During the height of the recession, there was an influx of
businesses opening, presumably due to layoffs and skyrocketing
unemployment," said Peter Bolin,
Experian's director of consulting and analytics. "While many of
these consumers-turned-entrepreneurs may have started their own
venture out of necessity as a way to bring in income, as the
economy has improved the rate of new business start-ups has
returned to a more consistent pace."
INFOGRAPHIC: Spotlight on small business: A look at new
start-ups
The analysis also found that the restaurant industry was the top
choice for entrepreneurs looking to start new businesses. In 2014,
there were 52.3 percent more restaurants opened than businesses in
the next-highest industry. The remaining industries in the top five
include personal services (6.9 percent), miscellaneous retail (6.6
percent), business services (6.3 percent) and general contractors
(5.5 percent).
"It's more important than ever to understand trends in the
small-business sector because they are such a critical component to
the growth and success of our economy," continued Bolin. "By
gaining insight into newly formed businesses, potential
entrepreneurs and lenders can use the data to their benefit.
Entrepreneurs can get an idea of which industries are most popular
(and potentially more competitive), while lenders can better
understand specific industries that are experiencing a higher
growth rate."
Despite the drop-off in business start-ups on a national level,
California was one of the few
states to see an increase in the number of businesses started in
2014, increasing by 17 percent since 2010. Furthermore, the top
five states with the highest percentage of start-ups during the
year were California (14.6
percent), Texas (10.3 percent),
Florida (6.9 percent),
New York (5.4 percent) and
Georgia (3.9 percent).
On the other end of the spectrum, according to the U.S. Small
Business Administration, on average 21 percent of businesses fail
after the first year. However, more than 50 percent of businesses
close after year five, and more than 75 percent will shut down
operations after year 15.
"While owning a small business can be rewarding, it's important
to remember that the market can be quite unpredictable," continued
Bolin. "Making it past the first year does not guarantee success;
you have to keep working at it. By making timely payments to
creditors and suppliers, entrepreneurs can show the
creditworthiness of their businesses and gain the necessary funding
to help them grow and succeed."
Additionally, the analysis found that while the restaurant and
personal services industries were among the most popular, they also
had the two highest rates of failure in 2014, at 9.2 percent and
8.1 percent, respectively. They were followed by special trade
contractors (7.3 percent), general contractors (6.8 percent) and
business services (6.0 percent).
About Experian's Business Information
Services
Experian's Business Information Services is a
leader in providing data and predictive insights to organizations,
helping them mitigate risk and improve profitability. The company's
business database provides comprehensive, third-party-verified
information on virtually all U.S. companies, with the industry's
most extensive data on the broad spectrum of small and midsize
businesses.
By leveraging state-of-the-art technology and superior
data-compilation techniques, Experian provides market-leading tools
that proactively support the entire credit life cycle, enabling our
clients to find new customers, process new applications, manage
customer relationships and collect on delinquent accounts.
About Experian
We are the leading global information services company, providing
data and analytical tools to our clients around the world. We help
businesses to manage credit risk, prevent fraud, target marketing
offers and automate decision making. We also help people to check
their credit report and credit score, and protect against identity
theft. In 2014, we were named by Forbes magazine as one
of the "World's Most Innovative Companies."
We employ approximately 17,000 people in 39 countries and our
corporate headquarters are in Dublin,
Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.
Experian plc is listed on the London Stock Exchange (EXPN) and
is a constituent of the FTSE 100 index. Total revenue for the year
ended March 31, 2015, was
US$4.8 billion.
To find out more about our company, please visit
http://www.experianplc.com or watch our documentary, "Inside
Experian."
Experian and the Experian marks used herein are trademarks or
registered trademarks of Experian Information Solutions, Inc. Other
product and company names mentioned herein are the property of
their respective owners.
Contact:
Jordan
Takeyama
Experian Public Relations
1 714
830 7561
jordan.takeyama@experian.com
Twitter: @JordanTakeyama
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SOURCE Experian