Startup
Ask SCORE                                                                        Word Count 401

Boost Your Odds of Startup Success

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

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

Nearly a third of business closures that government statistics assume to be
failures are not really failures at all. These businesses were considered a
success by their owners who simply sold off the pieces or closed them to
retire or pursue other activities.

Data from the U.S. Census Bureau’s Business Tracking Series show that
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, of course, but other assets such as market
savvy and the right people. Here are four factors that improve the odds of new
business survival:

1)        People. If you can afford to hire employees, do it. Well-staffed
businesses have better survival rates than solo operations.
2)        Startup capital of at least $50,000. Not easy, perhaps, but businesses
that start with less have higher failure rates.
3)        A college degree for the owner. Better yet, enroll in a college-based
entrepreneurship program.
4)        Home beginnings. To keep costs low, start 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 your business
carefully before taking the plunge,” says Tony Lee of StartupJournal. Even
though business failure rates aren’t as high as we think, aspiring
entrepreneurs still need to do their homework.

To learn more about building your small business, contact SCORE
"Counselors to America's Small Business." SCORE is a nonprofit
organization of more than 10,500 volunteer business counselors who provide
free, confidential business counseling and training workshops to small
business owners. Go to www.scoredm.org on the web or call (515) 284-4760
between the hours of 10:00 A.M. and 3:00 P.M. Monday through Friday.