Plan for success photo by WorldIslandInfo at FuturistMovies
About 1/3 of Small Businesses fail in the first 2 years, and just over half fail within 4 years (according to an SBA Study done in 2005). These are always controversial studies – how do they define Small Business? How do they define failure? Wouldn’t there be a big difference (higher?) failure rate in the last 2 or 3 years? All great points, but in general we can agree that there are a lot of businesses that don’t make it.
On the other hand, there are also lots of examples of businesses that are still in business but aren’t really making it. I ran across an interesting article in Fortune Small Business that initially caught my eye because it was about a local Kansas City business. The article on ‘Why Small Businesses Fail‘ is about a home furnishings boutique in Prairie Village called the Curious Sofa (caution the site loads with music on). If you haven’t been, Curious Sofa is a great store with lots of interesting stuff to look at.
Here’s the part from the article that I thought was really interesting:
Dusenberry’s financials explained clearly why her business has potential – and why she’s in trouble….But here’s the thing: Her statements show that she’s lost money eight years in a row.
Every year, Dusenberry said, she told herself that she was going to work harder and sell more stuff, but working harder doesn’t fix a broken business model.
Working hard, loving what you do, and having a skill or product that other people want enough to pay for are all part of the puzzle, but there are other things that are even more important and if you don’t figure them out, it can be a long way down.
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