I was reviewing U.S Bureau of Labor and Statistics information today and was surprised by the statistics relating to small businesses (defined as businesses with employees)….
20% of small businesses (with employees) fail in their first year
10% more fail in the second year
After 5 years 50% have failed
…and after 10 years only 35% remain.
Frankly, I was surprised by these numbers… in my experience more failures occur in the first years with only 20% or less surviving 5 years!
The Bureau statistics include small businesses of all sizes (with employees) and are not biased toward truly small businesses without employees or with only a few. Perhaps that explains the apparent discrepancy?
What didn’t surprise me was the pathetically low income levels of business owners…
According to Fundera…
75% of all business owners earn less than $75k per year… with only 7% earning over $150k.
Now, we know there are lies, damn lies and statistics…so we can make statistics support any position we wish to take
Why do we see so many business failures and such small earnings for entrepreneurs in small business?
Fundera did some research and has reported that the reasons given by the entrepreneurs for their business failures can be categorized broadly as follows:-
- 42% were products that had no market need (42%!! Are you kidding me? How does that happen?)
- 29% were due to cash flow issues/lack of capital
- 23% due to having the wrong team in place
- 19% due to strong competition
(you will note this adds up to more than 100% – that is because multiple responses were provided for the same failures)
What is conspicuously absent here is the main reasons for ALL business failures:-
THE ENTREPRENEUR WAS NOT PREPARED FOR BUSINESS OWNERSHIP BEFORE STARTING!!
In today’s world people are in such a rush to commence their business that they forget a basic principle of life: To build anything that lasts you must first build a strong foundation.
For the entrepreneur, or wannabe entrepreneur that means stopping, listening, feeling and creating a step by step plan that builds the foundation BEFORE starting, building or buying a business.
And what is needed to build that foundation?
- Knowing where you are going
- Knowing where you are today
- Financial stability
- Relationship stability
- Health consciousness
- Education and skills
- Passions and beliefs
- Understanding where success can be found
- Product ideation
- Business type
Failure, and years of struggle await anyone who chooses to ignore any of these foundational steps.
The picture above is a graphic representation of how the foundation is built.
My book, Unleash Your Inner Entrepreneur (available from Amazon or my website) goes into great detail on each of these areas. After reading it, you will understand exactly what you need to do to reduce the risks associated with owning your business.
If you don’t have time to read the book (or just plain don’t want to), and are anxious to get started today, my program “Get Unleashed” will have you ready in 90 days or less if you do the work.
Success never comes easy…but failure sure does. Which would you prefer?
You may be wondering who I am and how I can claim to prepare you for entrepreneurship in just 90 days. Right?
How does 40 years of business experience sound for a start? I am not some wannabe business guru that has read a couple of books and knows it all. I have literally “been there, done that”! From small private companies to multinational public companies, I have seen them all.
How does being at the forefront of not 1, not 2, but 3 brand new industries that didn’t exist when I was born sound? You will find details in Unleash Your Inner Entrepreneur.
How does owning and exiting several of my own businesses sound? Yep…done that too.
Who would you rather get advice from when needing brain surgery? Someone who has read a few books on brain surgery, or a brain surgeon who has done hundreds or thousands of operations?
Yup, thought so.
If you are serious about going into business for yourself, I am serious about helping you do exactly that…
But not just any business…
The perfect business for you. A business with purpose. A business that is driven by your passion. Your business that makes a difference in people’s lives.
Are you ready?
You could schedule a free and no obligation chat with me here… https://GetUnleashed.as.me/
No webinars. No sales pitch. Just a chat, ok?
Please don’t become a statistic.