A third-quarter Kauffman/LegalZoom Startup Confidence Index survey released on July 31, 2012 finds that younger entrepreneurs are much more confident about their future business prospects than their older counterparts, given the current economy.
Nearly 40% of startup owners believe the economy will deteriorate over the next year (up from 36% in the second quarter), yet 98% of 18- to 30-year-olds surveyed and 83% of 31-40-year-olds felt confident or very confident that their businesses would make greater profits in the next 12 months.
Industry experts see this optimism as an encouraging sign rather than an effort by the younger generation to turn a blind eye to reality and inconvenient truths.
John Suh, CEO of LegalZoom said, “Entrepreneurs require persistence and fortitude. It is encouraging to see that nearly 100 percent of younger entrepreneurs are confident in their future profitability, and this conviction has not been affected by the current economic climate.”
The survey also reflects that startup owners are losing faith in consumer demand. One-third of the 698 entrepreneurs surveyed expressed expectations of a moderate to significant deterioration in consumer demand over the next twelve months.
This negative outlook will affect their hiring decisions, as only 30% of those surveyed said they would hire additional staff in 2012, a decrease of 3% since the second-quarter survey last March. This is in contrast to U.S. consumer confidence which rose unexpectedly in July 2012 for the first time in five months.
Fairchild, Caroline. “Consumer Confidence in U.S. Unexpectedly Climbed in July.” http://www.bloomberg.com/news/2012-07-31/u-s-consumer-confidence-index-unexpectedly-rose-correct-.html. Bloomberg.com. July 31, 2012
Press Release. “Entrepreneurs’ Economic Confidence Slipping, Third-Quarter Kauffman/Legalzoom Startup Confidence Index Shows.” http://www.kauffman.org/newsroom/entrepreneurs-economic-confidence-slipping-third-quarter-kauffman-legalzoom-startup-confidence-index-shows.aspx Kauffman.org. July 31, 2012
Rogers, Kate. “Younger Startup Owners More Confident, Survey Finds.” http://smallbusiness.foxbusiness.com/entrepreneurs/2012/07/31/younger-startup-owners-more-confident-survey-finds/?intcmp=obinsite Foxbusiness.com. July 31, 2012
Survey Results. “Kauffman/Legal Zoom Confidence Index 3Q 2012.” http://www.kauffman.org/kauffman-legal-zoom-startup-confidence-index-3q-2012.aspx Kauffman.org. July 31, 2012