Original Date Posted: Jan 03, 2012
By: Susan Lane
Even though more businesses are being started today, the failure rate is still extremely high. Ninety percent of all small businesses will fail within ten years and fifty percent will fail within five years. Many of those that do not fail, “just get by” which means the owners could usually make the same amount of money working for someone else and have more free time.
The best reason for the high failure rate is poor planning. Life savings, loans from friends and home equities are risked on business start-ups without full consideration of consequences of risks. People either enter a field for which they have little knowledge or experience or they just do not plan properly and gather all the information needed for a particular business. These people would do just as well going to a casino and betting their money where the odds would be a little better. I know entrepreneurs are known as “flying by the seat of their pants,” but the really successful entrepreneurs study, study, study and study more before they begin a business and continuously afterwards. In fact, they never stop studying ways to make the business better and anyone not willing to put forth this effort should not go into business.
I still teach small business classes at a local library where all sorts of people show up to listen and learn. One night I noticed an elderly man in the audience who was listening intently to each word I said and when I told the class about the failure rate he shook his head. The next time he came to one of my classes, he spoke up shyly and said he was from Iraq. He had started several businesses in Iraq that were successful so he had problems understanding why anyone would fail in this country where everything is much easier, with no war being waged. When I explained the lack of preparation by people was the primary reason for failure, he still had problems understanding but when I told him, laziness he understood.
Anyone who will not spend the time to prepare is just plain lazy! No amount of money invested can overcome LAZY. Starting a new business or buying an existing business requires money, time, preparation and stamina (lots of stamina).