Convenience

148
Part 2:
Planning
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Exact numbers of start-ups and failures are surprisingly difficult to determine, how-
ever. For instance, a business may shut down because it is out of money (a failure) or
simply because the owner decides to do something else; or the business may be sold to
another business and cease to exist as an independent entity. Likewise, an ongoing sole
proprietorship that becomes a partnership or corporation is not really a new business but
may be counted as such in some statistics; similarly, a large corporation might launch a
new enterprise as a new wholly owned but separately incorporated enterprise.
In general, though, experts believe that new business start-ups generally run between
around 700,000 and 900,000 per year and that business failures generally run between
600,000 and 950,000 per year. Figure 5.5 illustrates trends in new business start-ups
and failures through 2008 (the most current data available).
Trends in Small-Business Start-Ups
Thousands of new businesses are started in the United States every year. Several factors
account for this trend, and in this section we focus on four of them.
Emergence of E-Commerce
Clearly, one of the most significant recent trends in
small-business start-ups is the rapid emergence of electronic commerce. Because the
Internet has provided fundamentally new ways of doing business, savvy entrepreneurs
have been able to create and expand new businesses faster and more easily than ever
before. Leading-edge firms such as Facebook, Google, and eBay, for example, owe their
–1,000,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
–800,000
–600,000
–400,000
–200,000
0
200,000
400,000
600,000
800,000
1,000,000