Stats show that the longer you stay in business the worse your chances of survival, at least for the first 10 years in business. According to the Bureau of Labour Statistics in the U.S. about 80% (four-fifths) of businesses with employees will survive their first year in business; about 66% (two-thirds) of businesses with employees will survive their second year in business; about 50% (one-half) of businesses with employees will survive their fifth year in business; and about 30% (one-third) of businesses will survive their 10th year in business. Prior to coming across this stat, I had always thought that it was the other way around, that survival rate improves the longer you stay in business. I was wrong!
According to a 2007 study, the biggest reason why businesses fail is a lack of sufficient capital plus cash flow problems. In fact, 82% of businesses failed because they experienced cash flow problems. Other reasons cited for business failure in a CBInsights analysis of 101 failed startups include lack of market need for services and products; not using the right team to run the business; over competition; pricing and cost issues; poor product and service offering; lack of business model; ignoring customers; poor marketing; loss of focus; and overwhelm amongst others. What is missing from this list are some of the emotional and psychological challenges faced in running a business. These ones are often not apparent but can be significant challenges for any business.
With our experience running our own business and working with other business owners we can relate to these. We agree that inadequate capitalization and cash flow issues are huge concerns for new businesses as we dealt with these concerns in our own business.
Over the next few months we will be marking our 5th year in business. We incorporated our firm in September 2012 and opened shop in January 2013. So in the coming five months as we mark our 5th year in business, we will be sharing our top five business challenges and how we overcame them. More importantly, we will share how we are positioning our firm to survive another 10 years. If you own a business or planning to start one, you don’t want to miss these as we will be sharing very valuable insights that can make or break your business. Based on the stats, your survival rate diminishes the longer you stay in business so it is very critical to position yourself to survive for the long-term. We will show you how you can do this. Stay turned!
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