Does Recession Lead To Small Business Formation?

Does Recession lead to small business formation?

I won’t quote them but I will summarize their thoughts…

1. Recessions tend to encourage small business formation because what has been called a “refugee” effect but as far as sole proprietorships, there’s only data from 1997.

2. But as far as the cost of starting a business goes, the cost to begin and maintain a business are lower than ever.

3. Keeping them up and running and profitable will be the issue but, net, they expect a larger number to exist and thrive after the downturn.

The question I have though is this: since we were told we were becoming a “free agent nation” already and that this was a huge trend giving the popularity of teleworking, self employment, virtual call center work, etc. how will we know if this formation of small business was CAUSED by the recession or just accelerated by it?

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