Discover The Best Kept Secret About Surviving The Odds!
Last month's Business Insight issue 3 discussed How To Find Your Entrepreneurial Niche without wasting HUGE sums of money! As you might expect, creating a sustainable business takes more than a strong ethos and being devoted to your cause.
Sadly, at some point in your entrepreneurial journey, you will face challenges that threaten the very survival of your business!
With that in mind, this Business Insight issue 4 unveils some of the dynamics behind the statistics to help you in your quest to survive the odds and make your entrepreneurial dream a lasting reality!
So, what makes entrepreneurship such a risky business?
Over the last 10 years, there has been a growing trend in entrepreneurship with many new businesses of all sizes being created, according to the Office of National Statistics. On average, roughly 539,000 businesses were reportedly born every year in the UK. And in the last 5 years, the annual average increased to roughly 616,000!
It may interest you to know that the vast majority of new business ventures are micro-businesses, made up of solo entrepreneurs (solopreneurs) and businesses with up to 9 employees. On average, this category (0 - 9 employees) represents 97.5% of all businesses born every year, and this percentage remains about the same year after year. That means, in the last 5 years, an average of 601,000 businesses born every year in the UK were micro-businesses!
It's no wonder then that you may well be noticing an increasing amount of competition in your chosen field of expertise! Whilst it's helpful to find your expert self (the thing you feel you were born to do that makes your heart sing) so that you can create a business you want to sustain, you may well have already decided what business to create based on other factors.
Of the many conventional methods used to determine what your new business should focus on delivering, a common approach is to respond to market demand. Arguably, in most instances, your choice will be based purely on monetary reward. After all, logic tells you that if there is a strong enough demand for your product or service, your business will almost certainly survive and probably thrive!
And yet ...
... even without the added complication of global pandemics and financial crises to contend with, it’s a sad fact of life that a staggeringly high number of start-ups based in the UK will fail within 2 to 5 years!
And the smaller your start-up is, the higher your chance of failure will be …
The smaller your start-up is, the greater your chance of failing at an earlier stage in the business cycle!
And as if that wasn’t bad enough ...
... since 2013 survival rates have declined, especially among small businesses with up to 50 employees!
And... even more alarmingly, statistics suggest that trend is accelerating!
So, what does this mean for you?
Well, if you’re a solo entrepreneur (solopreneur) and you have no employees …
your odds of surviving your 1st year of trading are roughly 86%! That’s about 4 out of 5 of you. Sadly, that means around 1 in 5 of you won’t make it as far as your 2nd year!
By your 2nd year in business, your odds of surviving are roughly 62%! That’s around 3 out of 5 of you. Sadly, that means around 2 in 5 of you won’t make it as far as your 3rd year!
By the time you get into your 3rd year, your chances of surviving are less than half at roughly 47%! That’s under 1 in 2! Sadly, that means about 53% of you won’t make it as far as your 4th year!
If you make it into your 4th year as a solo entrepreneur with no employees, your odds of surviving are even lower at roughly 38%! That's less than 2 out of 5 of you! Sadly, that means around 3 in every 5 of you won’t make it as far as your 5th year!
And by the time you reach your 5th year, your odds of survival drop to just 30%! That’s less than 1 in every 3!
That’s a harsh reality to face up to at the start of your new business journey!
So, how do you make your entrepreneurial dream a reality AND increase your odds of survival?
Year after year, many founders try to find their own way through the business maze, without any help, in spite of the growing amount of support and sources of information available to start-ups, entrepreneurs and business owners.
So, why might that be?
Many entrepreneurs tell us their main reason for going it alone is fear of unwanted interference.
You may feel the same!
Like them, you may also want to create a business and run it your own way without being forced to do things you don’t want to do. This may well resonate with you even if you haven’t launched a business yet!
Nevertheless, statistics prove you stand a much better chance of surviving the odds when you get the support you need to run your business. Even if you have a micro business with 1 – 9 employees, just like the majority of firms in the UK, your odds of survival improve.
According to the Office of National Statistics …
In your 1st year of trading as a micro-business, your odds of survival improve by 4% to roughly 90% (rather than just 86% as a solo entrepreneur). That’s 9 out of 10 of you that survive. Which means, sadly, 1 in 10 of you won’t make it as far as your 2nd year!
By your 2nd year as a micro-business, your odds of survival improve by 7% to roughly 69% (rather than just 62% as a solopreneur). That’s 7 out of 10 of you that survive. Sadly, that means around 3 in 10 of you won’t make it as far as your 3rd year!
By the time you get to your 3rd year as a micro-business, your odds of survival improve by 9% to roughly 56% (rather than just 47% or less than half of solo entrepreneurs). That’s almost 6 out of 10 of you! Sadly, that means 4 in every 10 of you won’t make it as far as your 4th year!
Having made it to your 4th year as a micro-business, your odds of survival improve by 12% to roughly 50% (rather than just 38% as a solo entrepreneur). That's 5 out of 10 of you!
And by your 5th year as a micro-business, your odds of survival improve by 14% to roughly 44%. That’s more than 4 in 10 of you! That’s much better than just 1 in 3 for solo entrepreneurs! Nevertheless, it still means around 6 out of 10 of you won’t make it that far.
So, now you know you stand a much better chance of surviving the odds when you get the help you need to start and grow your business. And the good news is, the help you need is available in many different forms.
So, what help should you look out for?
As you might expect, not all information is good information. Just like every other industry, you need to be selective …
Seek help from accredited providers who have proven expertise and sufficient experience to guide you through your journey …
The very best quality providers will have authenticated material published and used in real-world situations, which has been freely selected by prestigious institutions without enticement ...
Make sure your preferred supplier has the credentials they claim to hold by checking with the relevant institutions directly. If in doubt, check and check again …
Do your own research and ask for recommendations from people you trust. Expect legitimate providers to be upfront with you about all their terms and conditions …
As with most things in life, if the advice is worth having, it’s worth paying for. However, the price you pay should be reasonable and proportional to your needs …
Legitimate providers will be upfront and open with you about how they are funding any free advice and support they choose to offer.
So… how can you reach new levels of success on your entrepreneurial journey?
Whether you are ...
an Aspiring Entrepreneur taking your first steps,
a Progressive Entrepreneur who’s made it through the start-up phase,
a Proficient Entrepreneur who's ready to unleash untapped potential,
or a Serial Entrepreneur creating your business portfolio ...
You can learn how to overcome, and even avoid, pitfalls frequently encountered when creating and running your own business empire.
With the know-how you need, over 30 years of hands-on experience, globally renowned accreditations, and published material (see Innovation in Leadership post)
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