Thursday, September 28, 2006

Are new business ventures getting smarter?

Back when I was in business school I was taught the basic general rule of thumb that 50% of businesses fail the first year, and then it gets worse from there. However, new statistics from the Small Business Administration shows that the stats are actually quite a bit better than that.

So my question is... have those statistics changed from several years ago and businesses are indeed getting smarter, or have they always been skewed? Looking a bit into it (and I am having a little trouble finding the stats on the site), it seems like it is actually a rule of 50% last 5 years or more. What comes to mind then is that professors were trying to convince us that if we did decide to start our own business... that we did so with as realistic an outlook as possible.

This bodes well in many ways. Those of you that are interested in starting their own business, enjoy looking at those numbers. In my opinion, 50% of the people that start their own businesses will do so with an improper outlook, with a lack of necessary skills, and for the wrong reason. The first article I pointed to from Business Know-How has 7 tips on what not to do when starting your own business, and while it is generally common sense, it certainly won't hurt to read through it and examine your own business aspirations.