Why do Start-ups Fail?

“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

Reasons to Own a Small Business

Thinking of starting a small business? You're on the right track. There's a lot of thinking to be done before you plunge into entrepreneurship. Below are some of the reasons why you should take that plunge:

• You are your own boss. Of course, you live or die by your decisions, but that’s good - isn’t it?


• You get to do what you’re interested in – you can turn a hobby or interest into a profitable enterprise.


• Your firm, your deadlines - meeting your own targets can be a huge motivation to work hard and drive the business forward.


• Get creative – Being an entrepreneur gives you the freedom to express yourself and develop your concept in any way you choose.


• It’s not hard to set up a business.


• It can be very profitable - if you run your business well, the rewards can be huge. And, from a purely selfish point of view, you will keep most of the profits yourself.


• It’s not boring – an entrepreneur’s work is not just busy, it is also extremely varied.


• Cut the commute.


• Your big dream really can become reality.

Still not sure? This set of quizzes and check-lists from the U.S. Small Business Administration will quickly and simply help you determine if you're ready to start your own business and give you some factors to consider in your planning.