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Small businesses are extremely important to the US economy. Figures released by the Small Business Association show:
- there are approximately 23 million small businesses in the U.S.
- An estimated 550,000 new employer businesses are created every year.
- small businesses hire a larger proportion of employees who are younger workers, older workers, and part-time workers.
Small Business:
- provide approximately 75% of the net new jobs added to the economy.
- represent 99.7% of all employers.
- employ 50.1% of the private work force.
- provide 40.9% of private sales in the country.
- account for 39.1% of jobs in high technology sectors.
- account for 52% of private sector output.
- represent 97% of all U.S. exporters.
By doing meticulous upfront analysis, and developing a business plan, the chances of successfully launching a business, and achieving your goals, are actually high. However this is not the case with every business, as you will see below. On average over 550,000 businesses cease doing business in the US every year. According to the U.S. Small Business Administration, over 50% of small businesses fail within the first four years.
How do you ensure you succeed?
Well, take a look at the figures below that explain the reasons for small business failure. As you do that, add up the percentages of reasons that are external to the business—that is, outside the business owners’ control.
32.1% Poor management of financial activities
14.6% Lack of management competence or experience
12.4% Inflation and economic conditions
12.3% Poor books and records
10.7% Sales & marketing problems
09.0% Staffing problems
06.2% Union problems
02.7% Failure to use external advice
It’s about 18.6%. Inflation and economic conditions at 12.4% and union problems at 6.2% are the only two factors outside the control of business owners or managers. So, outside influences account for only 18.6% of the reasons why small businesses fail.
We can help you succeed!
82% of the time when businesses fail, the owners really could have done something differently to stop that from happening. The problems were actually in their control. This is good news! Fundamentally, it means if you’re having problems in an area of your business, you usually can do something about it. With the right help and more involvement with your team, you’d normally be able to get each and every one of these factors in order.
At MyBusinessPlans.com we encourage you to develop a comprehensive business plan covering a three year period and update it on an annual basis. Even the best prepared plans get overtaken by events and require regular reviews to ensure you are on the path to success. We believe a solid business plan is the foundation on which your successful business is built. That, allied to the broad range of services we provide, makes us a compelling choice for your business as you tread the thin line between success and failure. |
