One of the quickest ways to gauge whether this is the right time to start a business is to take a look at the confidence level and growth of other recent startups. This is what the Ewing Marion Kauffman Foundation and Legal Zoom track each quarter of the year. The good news about the latest report? In the latest Kauffman/LegalZoom Startup Confidence Index, startup business owners’ confidence reached the highest level since the study was initiated in first quarter 2012.
The report’s findings were based on 1,742 responses to a nationwide, July 2013 survey distributed via email to LegalZoom customers who formed their entities within the last six months. Some key findings of the second-quarter 2013 report include:
- 85 percent of startup owners express confidence that the next 12 months will bring greater profitability
- 74 percent of entrepreneurs said they believe the economy will improve or stay the same over the next 12 months, a 10 percent increase from Q1
- 37 percent of young businesses said they plan to hire employees, and an astonishing 69.5 percent of the startup owners anticipate having six or more employees within the next five years
Why are these findings so crucial for new startups? “Tracking the perspectives of new business owners provides us with an important economic gauge,” said Dane Stangler, director of Research and Policy at the Kauffman Foundation. “Their growing confidence in the future, even incremental, is a sign of how they are experiencing economic conditions right now. And it appears to be very good, based on these findings.”
Even more notable is the anticipation of future hiring. “In past surveys, a jump in optimism over the economy did not always correlate with increased plans to hire,” said John Suh, CEO of LegalZoom. “In this survey, conviction about the future seems to translate into a higher intention to hire, signaling a promising year for job growth.”
For a more in-depth look at the findings of this report, check out some of the key statistics in the infographic below.