“Once you've hit five years, your odds of survival go way up. Only two to three percent of businesses older than five shut down each year.” David Birch - MIT
The stats are scary! 50% of all businesses fail within 5 years. Why? I've listed 10 reasons below. Can you think of more?
1.Lack of experience
2.Insufficient capital (money)
3.Poor location
4.Poor inventory management
5.Over-investment in fixed assets
6.Poor credit arrangements
7.Personal use of business funds
8.Unexpected growth
9.Competition
10.Low sales
Here are a couple of books if you are interested in learning more:
- Small Business Management, by Michael Ames
- The Do It Yourself Business Book by Gustav Berle
3 comments:
I know this is old, but I'll keep this in mind because I plan on running my own business soon. I know it'll be tough, so I can use all the help and advice I can get. More recently I've been thinking about buying a business instead of starting one from scratch. Maybe a franchise? Home based? I’m not sure. Do you have any suggestions? Advice? Thanks.
It really depends on your line of business; how much time/ money you have to invest;your personal contraints (family, travel, etc). There are so many "get rich quick" schemes out there that you really need to do your homework around this. I would suggest speaking to as many people as possible. This will help you formulate a plan for your self, that you can then take to experts in your field of interest to help you reach your dreams. Good luck.
Thanks for your help, Manny. I really appreciate it. I've been doing more research, and it's been helpful. I think I might join a small business group or something, and I did manage to find a potential business to buy on BizTrader.com. The economy might be very shaky right now, but it'll get better, and hopefully by the time I get the ball rolling. Thanks again.
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