If all the talk in the business world about succeeding as a start-up leaves you feeling like you’re tuned in to some very foreign language, then this will serve as a welcome translation guide.
Are you in business or aspiring to be? Understanding business failure is a key to your success. Let’s get you headed in the right direction.
The decision to start your own business should be made with a full understanding of the risks involved. If you go in with both eyes open, you will be able to anticipate problems, reduce the possibility of loss, and increase your chances of success. The prospect of failure should serve as a warning to you. Many new businesses do not get past their second or third years. Running a small business involves much more than simply getting an idea, hanging out a sign, and opening for business the next day. – Timothy S. Hatten in Small Business Management, Entrepreneurship and Beyond
Businesses fail. Some much quicker than others. Supposing, it can never happen to you is the most preposterous thing in the world of business. The rate of business failure varies greatly by industry and are affected by factors such as type of ownership, size of the business, and expertise of the owner.
The decision to start your own business should be made with a full understanding of the risks involved. Do some digging, before you make that big leap into business. If you go in with both eyes open, you will be able to anticipate problems, reduce the possibility of loss, and increase your chances of success. The prospect of failure should serve as a warning to you.
Think, for instance, of the resources. How many start-ups are serious about ensuring that resources are and will be available on daily basis? Very few do. Those are the start-ups that survive their first three years in business.
Look at it this way, if you can’t run with people in the field, you definitely can’t run with horses. That’s what business world is like. It’s a bug eat bug world. If you fail to work through the business fundamentals, you can’t survive the fierce competition out there.
Let’s face it, even though business owners launch their ventures with the best of intentions and work long, hard hours, some businesses inevitably fail. Dun & Bradstreet, a financial research firm, defines a business failure as a business that closes as a result of either (1) actions such as bankruptcy, foreclosure, or voluntary withdrawal from the business with a financial loss to a creditor; or (2) a court action such as receivership (taken over involuntarily) or reorganization (receiving protection from creditors).
Work on developing your entrepreneurial arsenal, and then launch that big thing. The world wants what you have to offer. Just don’t ne naïve.