For the past ten years, small businesses have been the stronghold of domestic job creation in the United States. Currently, there are more than 27 million small businesses in the U.S., but only one in ten small business startups will succeed. 80% of new businesses fail within the first three years, and the remaining businesses will be slashed in half by the five year mark. But there’s a silver lining in all this failure — entrepreneurs with multiple attempts at starting a business are the most likely to succeed. If at first you don’t succeed, try, try again.
The average technology entrepreneur has a middle class background, parents with less education than them, and a growing family when they launch their business. It’s not always colleges kids like Zuckerberg, starting companies from their dorm rooms. In fact, more established tech entrepreneurs have a much greater chance of startup success. First time entrepreneurs shouldn’t fret, although there’s a meager 10% chance that the first business they start will be the one that succeeds. After your first failure, your chances of success will markedly increase.
In a survey of successful small business entrepreneurs, virtually all business owners (96%) cited their prior work experience as an important factor of success. 78% agree that learning from previous failures was also an important step to their current success, with a similar amount (74%) citing good old fashioned luck as another factor. Two in five of the surveyed entrepreneurs believed that having at least one failure was extremely important. Take note: failing gracefully could be the key to your future success.
If you’re funding your small business with your own savings, you’re not alone. 70% of first time business owners do the same thing. While most of these businesses will inevitably fail, the money isn’t necessarily wasted. Subsequent business ventures by these same entrepreneurs found outside funding at an early stage of their business 60% of the time.
If you want your startup to succeed, don’t be rigid. Startups that “pivot” (read: trash their model and start over) have 3.6 times more user growth, raise 250% more money, and are 52% less likely to scale prematurely than startups with a rigid business model. The best thing you can do for yourself and your company is be bold and unafraid to fail, as 98% of successful small business owners cite being held back by a fear of failure as the top reason that potential entrepreneurs are held back.
Source: OnlineMBA.com
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