Business Opportunities

According to the U.S. Small Business Administration, more than one-half million businesses started (employer births) each year between 1990 and 2003. In the years between 1990 and 2003, the highest number of business starts in one year occurred in 1996, with 597,792; the lowest number for one year occurred in 1991 (541,141). The estimated number of employer births during 2003 was 572,900. The total number of employer firms has been increasing each year since 1992. In 2003 there were an estimated 5.7 million employer firms. (See Table 9.1.)

The annual rate of business starts varies from state to state. Table 9.2 provides a state-by-state listing of the number of "employer firm" business starts in select years between 1990 and 2003. These constitute businesses that employ one or more workers. In 2003, when the number of employer firm births declined by 2.8%, the state with the most employer firm business starts was California, with 113,500 business start-ups. The next state was Florida, with 69,711 business start-ups in 2003. However, the 2003 figure for California actually represented a 13.3% decline from the 130,840 business start-ups in 2002. As well, the Florida statistic represented a decline of 4.1% in 2003, from 72,720 in 2002. (See Table 9.2.)

The state with the highest year-to-year increase in 2003 business starts was Arkansas, with an increase of

TABLE 9.1 U.S. business measures, 1980–2003 "Table 3. U.S. Business Measures, 1980–2003," in Small Business Economic Indicators for 2003, U.S. Small Business Administration, Office of Advocacy, August 2004, http://www.sba.gov/advo/stats/sbei03.pdf (accessed January 8, 2006)

TABLE 9.2 Employer firm births by state, selected years 1990–2003 "Table 7. Employer Firm Births by State, 1990–2003 (Selected Years)," in Small Business Economic Indicators for 2003, U.S. Small Business Administration, Office of Advocacy, August 2004, http://www.sba.gov/advo/stats/sbei03.pdf (accessed January 8, 2006)

34.8%, from 5,381 in 2002 to 7,253 in 2003. This increase followed another large increase (34.9%) from 2001 to 2002. Other states registering high increases in 2003 include Montana (27.4%) and Idaho (19%). (See Table 9.2.)

Georgia, which recorded a 23.9% increase in business start-ups from 2001 to 2002, experienced a 15.8% decline in start-ups in 2003 (from 28,756 in 2002 to 24,217 in 2003). Besides Georgia and California (as noted above), other states experiencing significant decreases were Colorado (11.4%) and Massachusetts (10.7%). (See Table 9.2.)

Reasons for Becoming a Business Owner

In the Characteristics of Business Owners Survey, conducted by the U.S. Census Bureau in 1992, business owners were queried on the reasons for embarking on their own business venture. These particular statistics were not updated in the 1997 survey and, as of January 2006, have not been included in reports released for 2002 data. The survey revealed that one-fifth (21.3%) of business owners reported that they became an owner to have a primary source of income, while one-fourth (25.6%) wanted to have a secondary source of income. Another one-fifth (21.5%) wanted to be their own boss. Less than 3% wanted to bring a new idea to the marketplace. Approximately 8% wanted to have more freedom to meet family responsibilities.