Running a business successfully requires significant investment in resources – this is something we all know. However, one of the most frequently overlooked resources is the long-term planning that comes from deep research and consideration of where you want to go. According to the U.S. Bureau of Labor Statistics, as of 2024 almost two thirds of businesses fail within their first ten years – almost half within their first five years. Why does this happen? It’s much harder to quantify why a business fails, because there is no centralized reporting of those reasons.
Almost two thirds of businesses fail within their first ten years – almost half within their first five years.
CB Insights shared these findings based on a sample of 100 startups that failed: 42% failed due to the services or products not having a market for them. Almost 1 in 5 businesses failed because they lack an actual business model. You must be thinking – how did more than 40% of these businesses not have a market? Why did they start up a business in the first place?
The fact is that many small businesses have great ideas – and often see a need for their services or products. Entrepreneurs that start up businesses aren’t dumb – they know that what they have to offer is marketable. The failure here comes from lack of planning and research. Does your business have skilled employees in providing marketing or professional services? I bet it does. But have you done the research to find out where those services are needed the most? Do you have a growth plan in place for how to scale your business between years 1-5?
Small business leads many fields in innovation – larger companies generally do not spend the time or money investment to come up with new ways of achieving success. Startup owners have keen insight into what they want to offer the world – but one person can only do and know so much. If you’re looking for someone else to check over your work, or help you prepare a longer strategy for your company, Urspera Advisory can help you do that. Don’t become a statistic – use those entrepreneurial brainpowers to admit when you need help.