Boost your odds of startup success

Boost your odds of startup success phillyBurbs.com

If you’ve dreamed of business ownership for years, but stories of business failures have stopped you, take heart. There are many ways you can tilt the odds of success in your favor.

For one thing, the daunting statistics often bandied about that nine out of 10 new businesses will fail are likely false. A review of business closings by StartupJournal.com, a Dow Jones and Co. division, shows that the number of outright failures is highly exaggerated.

Nearly one-third of the business closures that the government calls failures were considered successes by their owners, who simply sold them or closed them to retire or pursue other activities.

Data from the U.S. Census Bureau’s Business Tracking Series show about 65 percent of new businesses are still operating after four years. That means new ventures actually succeed more often than not.

But the more resources a new business has to start with, the better its chances. That includes money as well as other assets, such as market savvy and the right people.

These four factors will improve the odds that a new business will survive:

People: Hire employees if you can afford to do so. Wellstaffed businesses have better survival rates than solo operations.

Start-up capital of at least $50,000: Businesses that start with less have higher failure rates.

A college degree for the owner: Better yet, enroll in a college-based entrepreneurship program.

Home beginnings: To keep costs low, start the initial stages of your business from a home office.

The most common reasons for failure within the first few years include competition, mismanagement, high rent and insurance costs, high debt, inability to get financing, loss of clients and difficulty with collections.

If you’re ready to take the risk of starting a new enterprise, research the business carefully before taking the plunge, according to Tony Lee of Startup Journal.

Even though business failure rates aren’t as high as we think, aspiring entrepreneurs still need to do their homework.

Bucks County SCORE Chapter 570 is located in the Lower Bucks County Chamber of Commerce, 409 Hood Blvd., Falls, with counseling locations in Fairless Hills, Perkasie and Doylestown. For information, call 215-943-8850, e-mail score570@verizon.net or visit our Web site at www.score570.org .

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