Why Do Small Businesses Fail
Youve heard it before: Half of all small businesses are doomed to fail before their first year is out.
Youd think this statistic would put people off of opening small companies especially high risk ones like restaurants and retail stores but this doesnt seem to be the case.
When it comes to functionality, the general statistics are equally dire.
Statistics only get more discouraging as time goes on: 95 percent of small businesses are doomed to fail within five years. (Complete infographic below)
Of all the small businesses out there, we see:
- only 40 percent of them are profitable;
- 30 percent break even and
- another 30 percent are doomed to only lose money.
Why does the small business do so badly in a country where owning one is part of the national dream?
It appears that many new restaurant and retail store owners have trouble with the business aspects of their business. It turns out that, for new business owners, knowledge about how to run a company tends to be lacking.
Jon Rognerud is the #1 online marketing expert for Entrepreneurs. His best-selling SEO book, "The Ultimate Guide to Search Engine Optimization" from Entrepreneur Press/McGraw-Hill is in bookstores now. Act fast, and get a free gift here. Connect with Jon on Google+