Don’t worry, it isn’t true.
You’ve probably heard the statistic bandied about, that 9 out of 10 businesses close before the end of their first year.
Yet statistics from the US Census Bureau reveal something entirely different. According to the Census’s Business Tracking, 66% of new businesses actually survive for two or more years. Even more telling, 50% survive for four years, with 40% surviving for six years or longer.
It gets more interesting.
Though entrepreneurs have different definitions and varying degrees of success, many would consider their business a triumph if they were able to close, sell or walk away while the business is still turning a profit.
The Census statistics can’t possibly take into account that a properly articulated exit strategy might have been part of the business plan from the very beginning. Those statistics could easily warp the true picture since there is no way to accurately account for an intentional closure.
Of the numbers reported, a scant 33% of business declared having to close under duress, or situations the business owners considered a failing. Skill based service businesses such as real estate, financial planning, insurance, accounting, etc., have relatively low startup costs and high requirements for the individuals running them.
This truth enhances the possibility of a successful forfeiture of the business.
Consider a situation where an entrepreneur started a service based business, built up their authority, then closed that first business in favor of a second, more profitable enterprise in speaking or consulting.
If the old tired statistic that 9 out of 10 businesses close down their first year has in any way kept you from reaching for that next rung of your dreams, take comfort in the thought that it’s not really true.
Start your business tomorrow. Your odds just got a whole lot better.
