Startup Activity Increases 31 percent in 2013
19 Feb, 2014
The percentage of former managers and executives starting their own business rose in 2013 to its highest level since the end of the recession, according to a survey by Challenger, Gray & Christmas, a global outplacement and coaching consultancy. The increase in entrepreneurial activity among displaced professionals belies recent trends in the wider labor force where the number of self-employed Americans declined last year.
On average, 5.5 percent of jobless managers and executives started their own business each quarter in 2013, according to the survey of job seekers finding employment. The average start-up rate in 2013 was up 31 percent from 2012, when 4.2 percent of these job seekers launched their own enterprises. In 2011, the start-up rate averaged just 3.2 percent over four quarters.
Last year’s start-up activity among the one-time managers and executives was the strongest since 2009, when quarterly start-ups averaged 8.6 percent. The percentage of job seekers starting businesses rose steadily throughout 2013. In the first two quarters the year, the start-up rates were 4.1 percent and 4.2 percent, respectively. By the third quarter, the rate increased to 5.2 percent. In the final quarter of the year, 8.6 percent of former managers and executives started businesses.
“In the wake of the recession, we saw start-up activity among job seekers drop to some of the lowest levels on record,” says John A. Challenger, CEO, Challenger, Gray & Christmas. “This was undoubtedly due to a dire lack of confidence; not only in one’s ability to build a client base, but also in one’s ability to find traditional employment if the business venture fails. We are finally getting back to a point where aspiring entrepreneurs have more confidence in both of these areas.”
According to the Challenger data, on average, 84 percent of those starting businesses in 2013 were older than 40. Nearly one in four (24 percent) of those taking the entrepreneurial route was 55 or older.
Illustration by stockimages at Free Digital Photos.net
Source: Challenger, Gray and Christmas