Bloggers Have Bearish View on the Economy

In a recently released survey conducted by the Kauffman Foundation, financial bloggers believe that the economy presents a challenging business environment but that shouldn’t deter small business startups from opening their doors.

In the survey, 99 percent said that conditions are mixed, facing recession or in recession and 41% believe that the probability is still high for a double dip recession.

One part of this survey was of particular interest to small business startups. The survey asked bloggers to evaluate two different approaches to assisting small business startups: The first is subsidizing new “firm formation with targeted spending and tax benefits”. The second is, “reduce regulatory burdens and fees on new firm formation”. 37% preferred the first option while 82% favored the second option. The survey revealed that most agree that doing less to hinder growth is more favorable than trying to help small businesses more.

“We know that entrepreneurship is the key to long-term growth as well as job creation, but these results give a very clear signal to policymakers about the best way to actually generate more American entrepreneurship,” said Robert Litan, vice president of Research and Policy at the Kauffman Foundation. “It’s all about lowering barriers to the formation and growth of new scale businesses.”

Finally, 48% of economic bloggers gave Congress an “F” for their performance in the third quarter of 2010, ranking them more negatively than Wall Street Banks. In all categories of business, the 90% of respondents gave economic conditions a rating of “bad” or “very bad” indicating that the economic sentiment is very negative. This makes the environment challenging for small business startups who are just starting out.

Is this all bad news for the small business startups about to open their doors? Far from it! When sentiment is generally negative, the government tends to do more to stimulate small business growth. While the economic environment is reported as being challenging, the emerging small business startup can find a variety of different programs and funding options that make starting a business in this environment not only sustainable but also a smart business move.

All investors know that starting a business when the economy is thriving often takes more money up front than more challenging environments. If you’re looking to start a business, now is the time despite the bleak survey results above.