Form a LLC 2017 Yes? or No?

Form a LLC 2017? Is it the right year?

The best way to answer that is by looking at the previous start-ups and how they succeeded over the years. To form a LLC 2017 you’ll want to consider several factors.

First, let’s take a look at what the economy was doing over the last 20 years to determine what other factors played into the success or failure of a business before you form a LLC 2017.

Previous U.S. Recessions

The last three recessions according to economists were:

form a LLC 2014

  • 1990 Recession Jul 1990 – Mar 1991, lasted 8 months and U.S. hit 7.8% unemployment. Caused by the savings and loan crisis.
  • 2001 Recession Mar 2001 – Nov 2001, lasted 8 months and U.S. 6.3% unemployment. Caused by the Y2K scare, which created a boom and subsequent bust in Internet businesses.
  • 2008 Recession Dec 2007 – Jun 2009, lasted 1 year 5 months and U.S. hit 10.0% unemployment. Caused by the subprime mortgage crisis, which then led to a global credit crisis.

The numbers of new business formations from 1994 to 2012 are as follows according to the Bureau of Labor Statistics:

1994   550,308

1995   584,184         6.2% Increase from 1994

1996   588,326         0.7% Increase from 1995

1997   614,966         4.5% Increase from 1996

1998   609,584         0.9% Decrease from 1997

1999   609,569         0.0% Increase from 1998

2000   634,276         4.1% Increase from 1999

2001    630,875           0.5% Decrease from 2000

2002   612,069         3.0% Decrease from 2001

2003   609,378         0.4% Decrease from 2002

2004   602,677         1.1% Decrease from 2003

2005   632,510         5.0% Increase from 2004

2006   667,341         5.5% Increase from 2005

2007   656,107    1.7% Decrease from 2006

2008    626,771           4.5% Decrease from 2007

2009   548,201         12.5% Decrease from 2008

2010   507,129         7.5% Decrease from 2009

2011   537,526         6.0% Increase from 2010

2012   571,901         6.4% Increase from 2011

In 2000 there was an increase in new businesses formed by 4.1% over the previous year, yet there were two years in a row of almost flat growth and in the case of 1998, it was a .9% decrease. All lead to the 2001 recession where we saw 4 years in a row of a decrease in new business filings.

In 2007 there was a 1.7% decrease in new business filings from the previous year. The following three years saw decreases annually of 4.5%, 12.5% and 7.5% respectively.

With a recession there is no doubt a decrease in the numbers who want to start a new venture. What’s interesting is the number of years it takes after a recession before the U.S. entrepreneurs feel its safe to start a new venture. It seems to take 2 to 3 years before we see growth again.

In addition, we tend to see a slowing in growth prior to a recession, although not as dramatic as after a recession hits.

New Business Failure Rates

The failure rates of businesses formed in a given year according to Bureau of Labor Statistics shows the following from 1994 to 2012:

THIS IS THE SUCCESS RATE AFTER 1, 3, 5, 7 AND 10 YEARS

After 1 Yr After 3 Yr After 5 Yr After 7 Yr After 10 Yr

1994

79.8

61.2

50.2

42.1

34.2

1995

79.2

60.5

49.5

41.4

34.1

1996

79

60.4

48.8

41.2

34

1997

78.8

60.6

48.1

41

34

1998

80.6

60.2

48.7

41.9

34.8

1999

79.6

59

48.7

42.1

33.9

2000

78.9

58.5

48.6

42.1

31.8

2001

75.5

57.5

48.2

41.2

32.7

2002

78.4

60.2

50.4

42

34.4

2003

79.2

61.4

50.1

40.9

2004

79.1

61.3

48.2

40.6

2005

80

60.1

46.5

40

2006

78.3

56.1

45.1

2007

77.2

54.8

45.5

2008

74.4

55.8

2009

76.3

58.9

2010

78.6

2011

78.3

2012

The failure rates of new businesses formed at the time of the recession is greater than companies that formed in a non recession year.

Based on these statistics, it appears that waiting for a recession to go through its cycle is best before starting a new company. Success rates for 2011 were four percentage points higher than in 2008, the height of the last recession.

Form a LLC 2017 – Should you or not?

Is, 2017 the right time to form a llc or corporation?

Based on history of success rates of businesses after a recession, I would suggest that 2017 will be a great year for new companies and failure rates will drop compared with recent years.

To form a LLC 2017 you’ll want to check out different incorporation firms to help you establish your new corporation or LLC. To pick the best online provider of incorporation services make sure you check out this list of incorporation companies.

Prices vary by online incorporation service and although many are very close in price, there are a few with very unreasonable prices to watch out for. In addition, most online incorporation companies tend to provide the same or very similar services, so the price is what really matters.

 

 

 

About David Gass

David Gass is a serial entrepreneur and small business coach. He provides strategies and techniques for turning a business' online presence into profit. David is also a sought after speaker and author on the subjects of Entrepreneurship, Online Marketing, Buying and Selling Websites and Website Acquisitions. Connect with David Gass on Google+
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