Why Your Business Will Probably Fail

9
Out
 of
10
BUSINESSES WILL FAIL WITHIN ONE YEAR
A common myth not quite true
AVERAGE SURVIVAL RATE OF NEW BUSINESSES AFTER 6 YEARS IS:
39.8%

- Phillips and Kirchhoff, 1989

In industries where small firms do more innovation, survival rates are higher.

In industries with scale economies and with high capital intensity, failure rates are higher.

There are approximately

30 Million

Small businesses in the US
(Under 100 Employees)

They account for

40%

U.S. Gross national product

60%

U.S. Work Force

According to the Commerce Department, of every 10 small businesses that are opened:

7/10

Seven Will Survive their first year

3/10

Three will survive after three years

2/10

Two will remain after five years

Having Access to Capital Doesn't Guarantee Success

look at the statistics of companies funded by 2 popular startup incubators

Y-combinator’s seed funded companies

22%

Failures

57%

still independently operating

29%

got further funding post-Y-Combinator

10%

acquired

Techstars Seed Funded Companies

10%

Failures

69%

still independently operating

56%

got further funding post-Y-Combinator

14%

acquired

vc vs non-vc company failure rates

30%

of VC funded companies fail within 10 years

60%

of non-VC financed companies fail within 10 years

Distinguishing Factors Of Surviving Companies

Proper Management of Finances

Not being properly funded or failing to keep a tight reign on receivables and payables are examples of financial mismanagement. Keeping good books and records of sales, expenses, etc., can determine the failure or success of a business

Management Competence and Experience

Business owners or managers are often very good at doing the technical work of their business. But they also have to learn/earn the skills to run a business to succeed.

Understanding Sales & Marketing

Selling a product or service is the core of any business.

Realise that most variables are under your control

Disaster, fraud and other external factors are not the most common cause of business failure. The success of a business is mostly up to you!

MergePay wants to help you not fail by giving you insight into your business finances

A simple and beautiful way to keep an eye on the financial heartbeat of your business

Apps TRY MERGEPAY FREE