In Brief: Fewer New Businesses; Good Times Blamed

More than 3 million businesses were started in 1996, according to a study released in December by the National Federation of Independent Business.

The business-creation total was off 14% from 1995, and William Dennis, senior research fellow for the small-business trade group, said he believes the decline continued in 1997.

Mr. Dennis said start-ups dropped because when the economy and labor market are strong, people are less inclined to risk starting a business.

"There are lots of other opportunities for people during good times," he said.

The number of businesses created dropped 18% in 1996 in the Northeast but just 5% in the Midwest.

Nearly two-thirds of 1996 start-ups were home-based, and 49% of the 4.1 million owners worked less than 30 hours a week at them. A fifth of the start-ups employed people other than the owner.

The trade group's study was based on monthly surveys that included interviews with 36,000 households.

It also found that 1.4 million people bought or inherited 900,000 businesses in 1996.