More new businesses are opening in New Jersey … but is it enough?
Business activity across the nation is surging.
According to federal Census Bureau and Labor Department data, about 6,600,000 new businesses were launched last year, up from 5,592,000 in 2013.
But what about here in the Garden State?
“Last year in New Jersey a record number of new businesses began, 97,835, but this year we’re on pace to break the 100,000 mark,” said Lt. Gov. Kim Guadagno, who is also secretary of state.
She pointed out “In 2014 there were 94,898 new business filings. These people have confidence in our economy and it really bodes well for real new jobs in New Jersey.”
Michele Siekerka, president of the New Jersey Business and Industry Association, agrees.
“The entrepreneurial spirit in New Jersey is alive and kicking. We see startups coming every day,” she said. “A lot of the entrepreneurial spirit is the result of the next generation, the millennials if you will, whose education drives them in that direction.
"They want to jump right in, in a leadership role, and they find those opportunities, especially given technology today. We hear every day in our colleges across the state of New Jersey of new businesses that are being incubated and born.”
Laurie Ehlbeck, the New Jersey state director of the National Federation of Independent Business, an umbrella group that caters to smaller companies, said there may be more startup businesses but “increased regulations and taxes have across the board discouraged entrepreneurship.”
At the same time, she said, many start-ups are extremely small.
“They might be doing it as a sole proprietorship, having no employees, or not actually having a storefront, starting their businesses from their home,” she said.
Guadagno sees the glass as half full.
“If each one of the 97,000 people who filed for businesses last year actually pays themselves, then we could see a huge drop in unemployment over the next year,” she said. “It’s a great New Jersey story. It’s a great indicator for us.”
She also said companies that are starting out in New Jersey and losing money initially can write off those loses with the net operating loss credit.
Guadagno said the New Jersey Business Action Center provides multiple services to help start-up companies and the Small Business Development Corporation also can offer help.
Ehlbeck said after talking to members of her organization, the outlook isn’t as rosy as it might appear.
“We’re still sort of at a standstill. We haven’t seen a whole big jumpstart in the state’s small business economy,” she said. “New Jersey’s economy continues to lag behind the rest of the nation. A lot of people may be thinking about starting their own business because they’ve become unemployed.”
She also stressed legislation currently pending in Trenton could make things worse.
“If small business owners are required to provide things such as paid leave or a $15 minimum wage, it discourages job growth,” said Ehlbeck. “Right now there’s a lot of uncertainty about regulations and laws that might be coming in the near future, so people are standing back and waiting to see what the climate is like before opening their doors in New Jersey.”
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