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to quote mark twain...there are three ways to lie : lies , damned lies , and statistics ! simply , small business does not have a high failure rate. all the statistics used to describe failure ( SBA , Dept. of Commerce , etc ) are actually describing business filings. thus , if i hang out my consulting shingle as a sole proprietor , gain market share and incorporate my sole proprietorship is counted as a failure. if later i add partners and change to an LLC my corporation is noted , statistically , as another failure. in this example after three years of increasingly successful small business ownership i have a 67% failure rate. too , if the stated 4 % success rate quoted was correct and there are currently 29 million small businesses in the US that represents 1.2b startups. the math does not , in any way , support the conclusion. in fact , small business has a better than 80% success rate after 5 years.
there have been 3 million startups during the recession. the large majority will survive. during the great recessionary era i have counselled more than 100 northwest small businesses , losing two.
the second point you must consider is differentiating between small business owners and entrepreneurs. entrepreneurs have a much higher failure rate including folks like rupert murdoch , donald trump , and paul allen.the average small business owner starts with less than $15,000. ( savings , IRA's , credit cards , family loans , home equity loans ) and has a very high success rate. their challenge is not failure or success but rather to create a family wage job with benefits and retirement funds.
go to my website : www.ridgefieldinstitute.com to learn more about the real challenges and opportunities associated with self-employment. thank you , thomas.
thomasa g. jones , ph.d.
small business management instructor
clackamas small business development center
posted 2 years, 11 months ago
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