Recession destroyed 170,000 small businesses between 2008 and 2010, study shows

The devastating recession claimed more than 170,000 small businesses in the U.S. between 2008 and 2010, according to a newly released census data.

A total of 6.79million small businesses operated within the nation's 938 metropolitan and micropolitan areas in 2010, the latest year for which official statistics are available.

That figure was down from 6.82million businesses in 2009 and 6.96million in 2008. The recession officially began in December 2007.

Gloomy statistics: More than 170,000 small businesses went bust in the U.S. at the height of the recession between 2008 and 2010

The Business Journals' On Numbers blog, which analyzed the census numbers, defines a small business as any private-sector enterprise with fewer than 100 employees.

The downward trend was not limited to any one region. Seventy-five of the nation's 100 biggest markets had fewer small businesses in 2010 than the year before, with Reno, Nevada, taking the biggest hit at 2.6 per cent.

The largest drop anywhere, regardless of the market size, was 7.4per cent in the Kirksville, Missouri.

Entrepreneurship also suffered a severe blow during the financial crisis.The number of self-employed Americans dropped 4 per cent to 9.8million between November of 2007 and June of 2009, according to U.S. Census Bureau data cited by the Federal Reserve Bank of Cleveland.

Twelve per cent more mom-and-pop shops went out of business in 2009 than in 2007.

Growing cautious: The number of self-employed Americans fell 4 per cent to 9.8million between November of 2007 and June of 2009

At the height of the unemployment crisis, many people who lost their jobs started small business out of necessity.

Eighteen per cent of entrepreneurs who launched their own enterprise in the last 12 months have done so after being laid off, which is double the rate before the recession, according to a recent poll by WaveAccounting cited by the Huffington Post .

But it has been tough going for many of the amateur entrepreneurs. Nearly four in five businesses have no employees, and they make an average $45,000 annually, according to the U.S. Census Bureau.



Downward trend: Twelve per cent more mom-and-pop shops went out of business in 2009 than in 2007

These alarming revelations come just days after President Barack Obama caused an outrage among the nation's entrepreneurs by saying in a recent speech that one cannot build a business alone.

Speaking in Roanoke, Virginia, Mr Obama said: ‘If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive.’

'Somebody invested in roads and bridges. If you've got a business - you didn't build that. Somebody else made that happen.’

Presumptive Republican nominee Mitt Romney had immediately pounced on the controversial comments, releasing a hard-hitting campaign ad attacking Obama on his purported business stance.

In the ad, the founder of a metal fabricating business in New Hampshire asks: ‘My father's hands didn't build this company? My hands didn't build this company? My son's hands aren't building this company?



War of words: President Obama, right, created an outrage when he said that one cannot build a business alone, prompting Mitt Romney, left, to attack him over his purported stance on business



I built this: Obama's ad is striking back at Romney's, which features a metal worker who built his own company New take: President Obama recently released a new political advert attacking one of Romney's ads, saying they took his words out of context

'Did somebody else take out the loan on my father's house to finance the equipment? Did somebody else make payroll every week or figure out where it's coming from? President Obama, you're killing us out here. Through hard work and a little bit of luck, we built this business. Why are you demonizing us for it?’

While the Democratic leadership has insisted that the president’s comments were taken out of context by his opponent, Obama and his team have gone into damage-control mode, releasing a new television ad in which the president says that ‘we’re all in this together.’