Understanding the Risk of Small Business
Posted by: Leo in News, Tips & Articles 913 ViewsSuccess in business is never automatic. It isn’t strictly based on luck - although a little never hurts. It depends primarily on the owner’s foresight and organization. Even then, of course, there are no guarantees.
Starting a small business is always risky, and the chance of success is slim. According to the U.S. Small Business Administration, over 50% of small businesses fail in the first year and 95% fail within the first five years.
These figures aren’t meant to scare you, but to prepare you for the rocky path ahead.
In his book Small Business Management, Michael Ames gives the following reasons for small business failure:
- Lack of experience
- Insufficient capital (money)
- Poor location
- Poor inventory management
- Over-investment in fixed assets
- Poor credit arrangements
- Personal use of business funds
- Unexpected growth
Gustav Berle adds two more reasons in The Do It Yourself Business Book:
- Competition
- Low sales
Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.
On the Upside
It’s true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks.
- You will be your own boss.
- Hard work and long hours directly benefit you, rather than increasing profits for someone else.
- Earning and growth potential are far greater.
- A new venture is as exciting as it is risky.
- Running a business provides endless challenge and opportunities for learning.
source: www.gaebler.com
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Entries (RSS)
October 11th, 2007 at 5:22 pm
Aaron Says: 5/15/2006 05:50:00 AM
Nice blog for people looking for business ideas.
I’ll be dropping by once in a while. :-)
solraya Says: 5/15/2006 05:58:00 AM
interesting…i like micro ideas
moks Says: 5/15/2006 08:58:00 AM
Maganda itong site mo, maraming matutulungan.
I will link you.
Eu-Leh Says: 5/15/2006 06:39:00 PM
Thank you aaron, solraya and moks for checking this site and for all your positive comments! I really appreciate it.
draemboy Says: 5/16/2006 01:58:00 AM
interesting…me to i like micro ideas …
btw…im fernando work here in saudi olaya talaten near in panda.nabanggit nga po ninio na d2 rin po kau sa olaya akaria,at magkalapit lang pala tau.ang company ko ay saudi architect as autocad operator..tel no..4801011..4824286 ext.22 my mobily no.0564155985..
nel Says: 5/17/2006 06:25:00 PM
nice articles, very informative…
jecvil Says: 5/18/2006 05:07:00 AM
great advise for business starter. There are a lot of points to consider.
Eu-Leh Says: 5/18/2006 01:28:00 PM
@dreamboy - magkapitbahay lang pala tayo sir!
@nel & jecvil - thanks for dropping by and leaving a comment.
Anonymous Says: 6/03/2006 12:47:00 PM
Very intersting hope there will be more Idea’s about small business,
Anonymous Says: 7/09/2006 11:19:00 PM
thanks for putting up this site, marami akong natutunan para sa mga katulad ko na balak mag business pagbalik sa ating bayang pilipinas .Salamat uli.
TnT
Eu-Leh Says: 7/10/2006 08:13:00 AM
wala pong anuman Tnt, and thanks for visiting the site.
iprodigy Says: 3/28/2007 02:23:00 AM
hello …I’m thinking of starting out a business…a studio where musician can record their own material. can anyone give me info
February 5th, 2008 at 3:29 pm
Full of ideas. thanks for sharing it with us. God bless.