Starting a new business is always an exciting and frightening time. Whether it is your main source of income or just a part-time endeavor, your money, self-esteem, and reputation are on the line. To make sure your business has the best shot at success there are some important statistics you need to know.
You are right to be nervous.
- Only 50% of small businesses survive past five years, and only 1/3 will make it to the 10-year mark. Do not let these numbers discourage you though. Yes, many small businesses close but it is not always because the failed. Factored into these statistics are businesses that closed for any reason. Some owners accomplished what they set out to do, or moved on to even larger enterprises.
- A U.S. Bank Study found that 82% of businesses that fail do so because of cash flow problems. Take this statistic into account before you take the leap, and plan accordingly. If possible, plan to have enough cash to operate for at least one year before making a profit.
- Over half a million new businesses start each month, but even more close each month.
There are reasons to be hopeful.
- You don’t have to invest a fortune to start a business. 1/3 of new businesses are started with less than $5,000. Another 58% got started with less than $25,000. Seed money to start a business does not have to be a deterrent. You may have to consider scaling back the size of the business you want to start, but that just leaves more room for growth.
- Some of the most profitable start-ups are in the following industries: accounting and bookkeeping, legal, real estate, and health-related services.
- Social media marketing is a huge trend for small businesses and one of the best ways to get the word out about your business.
- The average age of those starting a small business is 50. So, if you are thinking you are too close to retirement to chase that dream of opening your own business, think again. People are taking the skills that they have honed for years in the workplace and going out on their own. Their experience and knowledge are giving them an advantage over newcomers to the industry.
You will never work for a more demanding boss than yourself. This is one of the primary secrets of successful small businesses. There are many positives to owning your own business. You make the decisions about how your business is run. You don’t answer to others about how time and other resources are utilized. However, people do have the false concept that it will be easier to run their own business than to work in the traditional workforce. Most business owners who were once part of the workforce before deciding to start their own business attest that they work much harder in their own business than they did for others. Burn out and exhaustion is common, but the potential rewards and satisfaction are worth it for most.
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