According to a recent Job Creators Network Foundation survey, "Sixteen-percent of Americans say they are likely to start a new business in 2019 ...". This works out to about 32 million Americans.
Most won't.
Over the past couple of years about 400,000 to 500,000 employer small businesses and about 2.5 million solopreneur businesses have been started each year.
So it's much more likely that about 1.6% of Americans will start a small business in 2019 instead of 16%.
This is an example of the false positive problem with survey data.
When you ask people aspirational survey questions about what they will do in the future, many more people will say they are going to do something than will actually do it.
And starting a small business is aspirational. According to the same survey and shown in their chart below (click to enlarge), 62% of those surveyed said they'd like to run their own business.
Given this data, it's not surprising 16% would say they will do so in 2019, even though relatively few will.
We've asked a similar question in the annual MBO Partners State of Independence study for the past 8 years.
Consistently 13%-15% of those surveyed over this study period have said they will start a small business over the next 2-3 years. And again, we estimate only about 8%-10% of those who say they will have actually done so.
An important point is despite the false positive problem, this data is still quite useful. Tracking this data over time provides insight into the interest in starting a business by Americans.
But, and this is a big but, if you don't adjust the results for the false positive problem you end up with unrealistic numbers.
BTW, the JCN survey had another example of the false positive problem on a topic unrelated to small business.
Their survey found "Thirty-four percent of Americans said they are likely to buy a new car next year". This translates to about 70 million or so Americans.
The peak U.S. car and light truck sales year was 2016 when 17.6 million cars and trucks were sold.
It seems fairly certain that 2019 will not beat 2016 in terms of auto sales. So it seems even more certain no where close to 70 million Americans will buy a new car.
The false positive problem crops up in many surveys (including ours). Users of survey data need to be aware of this issue and take it into account when reviewing survey results.
from Small Business Labs http://bit.ly/2CMDvte
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