Think that starting up a new business is a piece of cake? Although opening up a business might seem like an ingenious idea, it is important to note however, that there is only a nine per cent chance of a small business (with under 20 employees) surviving its first 10 years, according to Dunn & Bradstreet, an international consumer trends company based in the United States.
A huge reason for so many failed small businesses is that many decide to open a business without any prior experience or knowledge in running a business. The most high-risk small business ventures are independent restaurants, retail stores, and direct sales (e.g. Pampered Chef, Mary Kay, Avon.)
Only about 40 per cent of small businesses are profitable, while 30 per cent break even, and the final 30 per cent continuously lose money.
Some reasons why businesses fail are that owners might be skilled at their craft but not at running a business, lack of consumer interest, tough competition, poor management, and high initial start-up costs.