We have all heard that most businesses fail in the first five years. But an in-depth study conducted in 1993 by the New Jersey Institute of Technology suggests those figures may be a myth. They found that no more than 18% of new companies fail during the first 8 years of business. 54% survive more than 8 years with their original owners or a change in ownership, and the 28% of the remaining businesses voluntarily terminate operations without losses to creditors.
While many of the one million people who will start businesses in the US this year will give up, go bankrupt and go back to the employee life, the statistics confirm that most of those people will find new satisfaction, a good living, and a path of pursuing their heart's desire.
In my previous article, I discussed the traits of successful entrepreneurs. Once you've done an honest assessment of these traits, an important exercise is to go through a market feasibility study for your business.
Having what you think is a good idea for a business may or may not be so good. There may be no market for your product or service, or the competition may be too tough to break through. You don't know until you do the research. Spend time looking at your competition. If you're planning on selling teapots on EBay, look at the other teapot sales people. If you're planning on putting together a website to sell affiliate products, look at others who do this. Ask yourself the tough questions: Who is making money at this? What are they doing to make money? What is the actual cost of setting up and marketing this business? What, realistically is my budget for marketing? Are there gaps in my knowledge that I need to fill before a start spending money on this business?
One of the most common mistakes of neophytes is not spending enough time getting the facts. This can be costly. What I have found, in most industries is that people who are already in the business are more than happy to give you information. Most people are not afraid that you'll use that information to put them out of business. On the contrary, most successful entrepreneurs share the philosophy that "a rising tide floats all boats." In other words, the more truly professionally behaving people there are in this industry, the better off, we all are. Get a mentor or a coach. Someone from the outside who can offer advice. Even if you have to pay for it, that's money well-spent.
Also, you may not know what you want to do, and you'll need to do research to find out.
