When you are about to start a new business you really need to understand the brutal statistics on failure to help remind you of what NOT to do!
Studies on small businesses have shown:
- 20% of them fail in their first year
- 30% in their second year
- 50% by year five
- A full 70% of small businesses don’t make it past their tenth birthday
Of the remaining 30%
- How many are doing well financially?
- How much free time is their owner enjoying?
- Is the business owner achieving their desired End Goals?
It’s not a great picture, is it?
However, entrepreneurial results can be fantastic – and not just for the lucky few. In fact, better preparation makes your desired end goals highly predictable.
- Don’t rush into a situation where you risk your family’s future simply because you were over-confident about your idea or lacked the patience to prepare well.
With business failure so common, unsurprisingly, there is a great deal of research into why businesses fail. Much of this research focuses on the symptoms of failure rather than the root causes.
For example, saying that a business failed for lack of cash flow is a bit like saying someone died of a heart attack when the root cause of the heart attack may have been an unhealthy lifestyle.
In most cases, the statistics for entrepreneurial success would be much higher if aspiring entrepreneurs:
- Built a Know Like & Trust community with like-minded others before launching their business
- Chose a business idea that has the best chance of achieving its truly desired End Goals.
- Learned from other entrepreneurs who are willing to help them avoid repeating common mistakes.
- Engaged with mentors and coaches who have achieved entrepreneurial success.
- After researching what entrepreneurial success requires, decided they were not cut out to be entrepreneurs and avoided the entrepreneurial route altogether (this could be a safer and wiser decision for some people).
- The starting place should not be the belief that your exciting idea is the most important ingredient in your success.
Unfortunately, a great new idea that is highly desired by your target market is NOT all you need. A great idea is merely a good start. You probably know of many great ideas that have failed and many mediocre ideas that have succeeded. A great example of this is the Windows operating system by Microsoft. Initially, it was not a great product but highly successful.
Some entrepreneurs have been highly successful without any business ideas of their own. They simply built a large Know Like & Trust network. In the process, they discovered great ideas they could commercially leverage. They built a network capable of making the ideas of others work. In so doing, they avoided risk altogether and developed multiple sources of ongoing income.
There are many ways of achieving your end goals – it’s all about how you view what you are looking for from the outset. In general, it’s great to work with mentors and coaches who can guide you toward your end goals.