Brian Head, Economist with the SBA Office of Advocacy, noted that "as a general rule of thumb, new 'employer' businesses have a 50/50 chance of surviving for five years or more.
The latest statistics from the Small Business Administration (SBA) show that Failer rates for the first year of business is 35% and 66% of businesses fail in the first four years[1]
Business failure statistics include those businesses that ceased operation following assignment, bankruptcy, foreclosures, receivership or other court proceeding and voluntary agreements that result in losses to creditors . These statistics do not include businesses that discontinue operations due to loss of capital, inadequate profits, ill health or retirement; if creditors are paid in full.[2]
According to David Birch, former head of a research firm specializing in studying small business data "Once you've hit five years, your odds of survival go way up," Birch said. "Only two to three percent of businesses older than five shut down each year."[3]
It's what David Birch, called the "I Had No Idea" syndrome. Would-be entrepreneurs don't realize what's truly involved with running a business.
reasons businesses fail
1. Start the business for the wrong reasons.
2. Poor or No Management Skills
3. Insufficient Capital
4. Poor Location
5. Lack of Planning
6. Overexpansion
7. No Website
8. Low Product Quality
Most established businesses continue to be successful
A Proven Location
The Right Product
Management
If you want to get into business, let someone else
take the risk and high cost of starting from scratch. Buying an established
business provides you with two of the necessary components of success:
a proven location and the right product. You provide the third ingredient:
Management.