If you have ever thought of launching your own business then you have probably heard the stat that the majority of start-ups fail. But just how many of these actually fail, why do they fail and how many are left to succeed? In this article we look at successful vs unsuccessful start-ups to find the answer.
There are some surprising stats for you here and a little advice thrown in for good measure. So if you have a great idea and think that’s all you need then take a step back and read this article. It could be the sound advice you need.
90% of Start-Ups do not Fail
The stat that often gets quoted is that 90% of all new start-ups fail, but there isn’t a great deal of truth to this. In fact, the rate seems to be around 60% and contrary to the belief that more start-ups are failing than ever, the rate seems to have remained the same for the last couple of decades now.
Even if you go back several decades you won’t find a time when this figure was even remotely true. In the early 2000s, right around the Dotcom bubble burst and left many new businesses destroyed in its wake, the rate was still less than 80% and this was the highest it has been for some time.
Why do They Fail?
Even though the 90% stat isn’t true, the fact that most start-ups fail will still be a worry for anyone looking to establish their own business. But there are some other factors at play here. Firstly, this includes every kind of start-up, from ones built on bad ideas, no budgets and zero planning, to the ones that had all of those things but were very unlucky.
There is no stat on how many start-ups fail when they have investment, planning and common sense behind them, but it would surely be considerably lower than the 60% mentioned above. That’s not to say that your business will succeed, but that if you plan for all circumstances then you should be okay.
This is something that start-ups rarely take into account because they build themselves on hope and excitement as opposed to common sense and rationality. Retail businesses fail because they get caught up in the profit margin and don’t factor in tax, packaging, shipping, insurance and marketing. Marketing companies fail because they struggle to get the clients, they battle with business litigation issues and they are in a highly competitive niche.
A good start-up is more than just a good idea. The idea is just the foundation and it’s what you build on this foundation that will determine your success or failure. Like a good foundation, the idea will always be there. It’s there in the beginning and it’ll still be there if you fail and the rest of the building comes crashing down. So if you want to avoid becoming a statistic then focus on more than just the idea and get planning for all eventualities right way.