Don't Forget the Training!
If you want a thriving business, you'll need to create an environment where people feel valued for who they are and how they contribute to the success of the business.
Everything you do as the leader of your business contributes to creating a high-performance environment; from having a clear vision, to sharing that vision with all employees, to a well-defined, results-oriented organizational structure.
Another important, but often ignored area of business development is training. Training is how you get your employees educated and excited to be contributing members of your organization. In our article Don't Forget the Training we discuss the an issue you must consider in your training plan: time management. Complete article
Proportion of New Businesses Founded in 1992 Still Alive By Year.
The data show that, across sectors, 66 percent of new establishments were still in existence 2 years after their birth, and 44 percent were still in existence 4 years after. (See chart 1.) It is not surprising that most of the new establishments disappeared within the first 2 years after their birth, and then only a smaller percentage disappeared in the subsequent 2 years. These survival rates do not vary much by industry. (See chart 2.) Despite the early success of the “dot-coms” during the 1990s, the information industry had the lowest 2- and 4-year survival rates, 63 percent and 38 percent, respectively.
Education and health services had the highest 2- and 4-year survival rates, 73 percent and 55 percent. According to the conventional wisdom, restaurants should bring down the averages for the sector that includes them, because they are constantly starting and failing. However, the leisure and hospitality sector’s 2- and 4-year survival rates of 65 percent and 44 percent are only slightly below average, despite including restaurants.
The U.S. Small Business Administration has seen lots of small businesses come and, unfortunately, go. According to the SBA, over 50% of small businesses fail in the first five years. Why? What goes wrong?
In his book Small Business Management, Michael Ames gives the following reasons for small business failure:
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
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
10. Low sales
These figures aren't meant to scare you, but to prepare you for the rocky path ahead. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.
On the Upside
It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks.
You will be your own boss. Hard work and long hours directly benefit you, rather than increasing profits for someone else. Earning and growth potential are far greater. A new venture is as exciting as it is risky. Running a business provides endless challenge and opportunities for learning.