The Numbers Don’t Lie

The 2007 numbers from the Small Business Administration’s Office of Advocacy are as follows…

There were 29,804 new small business startups in Georgia (that’s more than the number of marriages). There were 29,315 closures (higher than the divorce rate). It’s estimated that just 5% of the new businesses will be created to produce an offering that will satisfy an observable need that is in high demand while about 95% will be created because the owner is good at something and wants to create a company around that. (Not necessarily a bad things as long as there are plans that are followed.)

Of the 29,804 startups, about 79% of those, or 23,500, will fail within 5 years. The number one reason they’ll fail will be due to a lack of customers and revenue. About 10% of the new startups will create a marketing strategy and fewer will follow it. 

It’s hard to look at these numbers and not want to help. My message to those interested in starting a business is 1) do some research on new business ideas, and 2) create both a business and marketing plan. Do both of these well before you start a business.

If you've already been in business and haven't done these things, then get in gear!

Comments

[Ken Larson]

There are good points in your article. I would like to supplement them with some information.

For an all-volunteer site, dedicated to small businesses who wish to succeed in federal government contracting, please see the below site:

http://www.smalltofeds.blogspot.com/

The federal government will contract in excess of $80B to small businesses in the next fiscal year.
There are over 50 agencies or "Departments" in the federal government. Each of these agencies has a statutory obligation to contract from small business for over 20% of everything it buys.

Contracting officers must file reports annually demonstrating they have fulfilled this requirement. Not fulfilling the requirement can put agency annual funding in jeopardy. Small business has a motivated customer in federal government contracting officers and buyers.
Large business, under federal procurement law, must prepare and submit annual "Small Business Contracting Plans" for approval by the local Defense Contract Management Area Office (DCMAO) nearest their headquarters. These plans must include auditable statistics regarding the previous 12 month period in terms of contracting to small businesses and the goals forecast for the next year.

The federal government can legally terminate a contract in a large business for not meeting small business contracting goals. Approved small business plans must accompany large business contract proposals submitted to federal government agencies. Small businesses have motivated customers in large business subcontract managers, administrators and buyers.

There are set-aside opportunities available for small entities,veterans, disabled veterans, women and minorities. All it takes is navigating the system, persistance, asking questions, registering, marketing, teaming and working hard.
Small Business America is good at that.

[MarketingTwins-Randy]

Scott,
I enjoy reading STARTUPNATION (http://www.startupnation.com).

Also John Jantsch did a radio interview with them I think - go to http://www.ducttapemarketing.com/blog/2007/01/22/startup-nation-radio-interview.

If you don't care for the external links you can delete this comment, no problem.

It's fun to be one of the startups myself - it's crazy, but so exciting to be doing what I love and helping people do what they want!

Randy