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We
have all heard myths about small business failure rates
- a popular one is that 80% of all new businesses fail
within 4 year. It is also a false one. Ironically,
according to the Small Business Administration and the
Wall Street Journal, based upon data from the U.S.
Census Bureau (excluding sole proprietorships) about 80%
of all new businesses succeed after 4 years. Indeed,
over 400,000 small businesses are successfully operating
in the San Francisco Bay Area - even after the worst
recession in memory.
The
SBA looked deeper by examining 3,377 businesses that
filed for bankruptcy in 1994. Here is what they found:
What
are the elements that typify a successful start up
venture? Very simply, it is adequate resources and cost
containment. Generally, successful business owners had a
college degree, partners and/or employees, over $50,000
in working capital and worked from a home office. Failed
entrepreneurs were generally young, undercapitalized and
operated in service or retail trade.
Know
your costs: An unscientific conclusion is that
managing costs are the key ingredient for success. What
to do? Times are changing and business owners must
manage change. For example, a companion article
addresses how to manage increasing health care costs.
Don't
go alone: Whatever you do, don't try to do it alone,
just as you would not repair your own car or provide
your own health checkup. Have an outside firm a) assess
you as an entrepreneur and b) assess your business as a
sustainable source of income.
Call
us at The BENTLEY Companies for a free assessment
(925-609-1440 x200). Or call other top firms such as the
coaching firm, E-Myth Worldwise (www.e-myth.com),
who offers many educational services for CEOs to build
strong and profitable businesses. Specialty firms like
Y2 Marketing can examine your marketing and sales (www.y2marketing.com)
General financial advice can be provided by broad-based
companies like Bay Area Business Solutions (www.bayareabusinesssolutions.com).
You can also join CEO networking groups like The
Executive Committee (www.teconline.com)
who offers monthly forums to discuss business issues
with other CEOs. Using these resources will improve your
odds of being one of the winners in the entrepreneur
business.
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