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Report: “21% of California Small Businesses on the Brink”

As reported in

A report released last week showed that 21 percent of California small businesses believe they will fold in the next three years. The annual survey, conducted by advocacy group Small Business California, revealed low confidence in the state’s business and political climate among business owners.

“That 21-percent figure is particularly shocking,” says Hauge, who also owns a small insurance firm. “That should be unsettling for policymakers.”

Other research confirms this trend. According to analysts at Equifax, a credit firm, bankruptcies among small businesses in California have increased 81 percent since last year.

Small Business California has conducted the survey since 2005. That year, 68 percent of respondents said California on the “wrong track.” This year, it was 83 percent. Those who believed that the business climate may improve over the next few years also sank this year — from 59 percent in 2009 to 37 percent — and 33 percent of respondents said that neither political party represented their interests.

According to the federal Small Business Administration, small businesses account for more than 60 percent of job creation in the United States every year. It estimates that are 3 million small businesses in California, two-thirds of which are sole proprietors.

Hauge noted one positive figure — that 24 percent of survey respondents said they would be hiring in the next year. The Bay Area Council, another business group, released similar numbers last week.

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