Feb. 24, 2005 -- Growth in the nation's gross domestic product coupled with an increase in the number of new jobs added and a rebound in the venture capital market has combined, along with other economic indicators, to form an optimistic outlook on 2005 for small businesses.
In its recently released report, Quarterly Indicators: The Economy and Small Business, the Small Business Administration's Office of Advocacy found that both the economy and the number of new jobs grew through the fourth quarter of 2004 leading to increased optimism for small business owners.
The nation's gross domestic product grew 4.4% for the year -- 3.1% in the fourth quarter. The economy also added 2.2 million non-farm jobs over the past year.
"Economic conditions for small business continued to be strong in the fourth quarter of 2004," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. "And for the year, GDP growth of 4.4% is good news for small business. In the fourth quarter alone, businesses added over 600,000 net new jobs. The outlook for the small business economy remains bright."
That positive outlook also extended into the amount of money venture capitalists invested in small businesses. VC invested more than $2 billion in 2004 than in 2003, with $5,3 billion invested in the fourth quarter alone, according to the National Venture Capitalist Association.
DARREN DAHL is a contributing editor at Inc. Magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, NC.
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