Booming Start-up Statistics Mask Lackluster Reality

      August 29, 2014 11:52

      A record number of new businesses opened last month, but most of them were mom-and-pop operations run by retired baby boomers.

      The Small and Medium Business Administration said a total of 8,129 start-up businesses were registered in July, the most since statistics began in early 2006. The figure was also up almost 14 percent compared to the same month last year.

      There has been a steady increase in the number of start-up businesses this year, from 6,930 in January to 7,729 in April. It fell to 6,365 in May due to the impact of the ferry disaster but surpassed 7,000 in June and rose past 8,000 last month.

      But half of the new start-up businesses were mom-and-pop stores people run as a lifeline. Some 47 percent of those start-ups registered in the first seven months of the year were service businesses like tourist accommodations, restaurants, real estate agencies, and retail shops.

      People in their 40s and 50s made up the majority of fledgling businesspeople, suggesting that most were retired baby boomers, and they mostly opened real estate agencies or shops. Also, 50.4 percent of start-up business owners in their 30s opened small companies in the service industry.

      An SMBA spokesman said, "A growing number of people are showing interest in opening their own businesses thanks to government supports, but not many people are venturing into businesses with innovative ideas and technologies."

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