Every day new businesses open while others close. Like any new endeavor, there are plenty of risks involved when starting a business from the ground up. There's always that chance that a new small business won't work out, but don't get discouraged! Examine the numbers before you rule out your business' chances of survival.
According to the U.S. Small Business Administration, there are approximately 28.8 million small businesses in the United States. These small businesses make up 99.7% of all businesses in the United States. That number is huge! Sounds pretty promising right? Let's take a look at some of the statistics.
There's a greater chance of failure early on
Within the first two years of business, approximately two-thirds of small businesses make the cut. Over a time span of five years, about half of small businesses are still alive and kicking. Take it up to 10 years and you have approximately one-third of these businesses surviving. These numbers can tell you one thing: During those first few years, a small business runs a greater chance of failing. If you can make it past those hard years, you have a better chance of staying for the long haul.
All Business Loans has broken it down in this beautiful infographic:
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2 things that will help your business succeed
Why are these businesses failing? Many businesses end up crumbling because of cash flow issues. It takes a lot to run a business and if the money isn't coming in to cover those expenses, then you will have a problem. You also need to stay on top of budgeting and making sure that your statements are lining up like they should. If this isn't quite your thing, then you should be investing in a professional accountant and/or bookkeeper. This is a business expense that you can't afford to cut out, especially if you don't know what the heck you're doing when it comes to managing the business' finances!
In order to narrow down the chances of your business failing, you can make sure that you're well prepared ahead of time. It's imperative that you do market research to see if there's even a need for what you are trying to offer. Additionally, it's important to determine the potential risks involved in starting the type of business that you want. Different business types come with different risks. You have to have a plan for when those risks arise so your business won't have to suffer the consequences.