Do You Want to Expand Your Business? Expanding a business is popular because it can…
There are countless myths about opening a small business and how risky it is. These are only MYTHS. It is always risky when opening a business, no matter how big or small, and here are the facts about opening a small business and how successful you actually can be.
The Statistics of Small Businesses
According to Fundera, a news website for small businesses, small businesses make up about 99.7% of businesses in America. That equals about 28.8 million small businesses nationwide.
How can these numbers be true if opening a small business is so risky? Fundera explains, “About two-thirds of businesses survive 2 years in business, half of all businesses will survive 5 years, and one-third will survive 10. The longer a company has been in business, the more likely it is to stay in business—it’s those first few years that are the hardest.”
If the concept and the market align correctly, small businesses can be successful. If a small, no name sub shop opens next to a franchise like Jon Smith Subs, it will be harder for that small business to see success because they are competing with not only another sub shop, but a well-known brand. Two big portions of small businesses being successful or not is its location and if there is an ample market in the area they are established in.
Rumors of Small Businesses
Small businesses do not necessarily fail due to lack of business. A lot of the reasons why they just don’t make it has to do with cash flow problems. According to Fundera, 86% of closed small businesses failed because of this problem. This can result not only from cash going in and out, but more importantly is a result of a lack of time management and aligning when money should be coming in with the money going out.
A myth about the restaurant industry that is often thrown around is that within the first year, 60% of new restaurants close. This is not true, Fundera found that this has been construed from the original fact: that 60% of restaurants close within the first three years. Despite this fact not exactly being true, the restaurant industry is still one of the riskier small businesses to open. An alternative option to opening a new restaurant would be to invest in a franchise, which offers more security, a well-known brand name and room for success.
There isn’t as much risk as people think when it comes to starting a small business. There is a lot that factors in to be successful, but, according to the statistics, small businesses are very successful and make up the majority of American businesses. The first years may be difficult, and there is constant risk of sinking or swimming, but taking the proper precautions can lead to profit and success.
If you still have fears about starting a business on your own, there are always other options. Franchises always provide plenty of opportunities as well as training, support, and a recognizable brand name. If you are interested in learning more about other options, download this guide.