Share this infographic on your site!

The Most Tried and Failed Small Businesses

Embed this infographic on your site!

The editors at Top Business Degrees decided to research the topic of:

The Most Tried and Failed Small Businesses

General Stats

- Over 50% of small businesses fail within the first year
- 95% fail within the first 5 years
- Businesses with fewer than 20 employees only have a 37% chance of surviving the first 4 years
- only a 9% chance of surviving 10 years
- According to NFIB
- only 39% of small businesses are profitable
- only 30% "break even"
- Common reasons for failure:
- Lawsuits
- Continually losing money
- 30% fall into this category

High-risk Businesses

Independent Restaurants

- Failure rate: as high as 60%
- Owners are often skilled at their craft, but not at business
- The owner's ability to raise capital is key in whether a business will succeed or fail
- Restaurants also fail without proper marketing
- Location, location, location!
- Number of independent restaurants declined by 7158 during the recession
- During the first year of operations, 25.5% of independent restaurants close or change ownership
- Year 2: 45.1%
- Year 3: 59.4%
- Failure rate is higher in areas with a higher concentration of restaurants

Retail Stores

- Retail stores are more apt to fail due to fierce competition
- Marketing is key to get consumers interested
- High traffic locations are important, but often too expensive for business owners
- Retail stores require a significant initial investment
- 80% of retail clothing stores fail in the first 5 years
- Most retail stores fail because of
- poor management
- tough competition
- poor marketing

Direct Sales

- Higher than average failure rate for small businesses
- Examples include:
- Pampered Chef
- Mary Kay
- Amway
- Direct sales business owners must have
- exceptional sales ability
- stamina
- drive to succeed
- Improper training and lack of motivation leads to failure
- 40% of direct sellers spend less than 5 hours per week on their business
- 10% spend 30+ hours
- 99% of direct sales reps suffer significant financial losses
- less than 20% of retail products are purchased by anyone by the direct sales rep

Keys to Success in Small Business

- Start small
- a common downfall is tying up too much cash in overhead at the beginning
- Know your market
- learn as much as possible about your demographic before you open your doors
- Maintain quality merchandise
- Select merchandise carefully to meet your market's needs
- Listen to your customers
- Customer service should be a main focus. Happy customers will come back
- Be receptive to customer suggestions
- Company goals
- Set goals for a five-year target point
- Plot your course and break down your goals and strategies into a one-year plan
- Plan and control your inventory
- Establish a system to know and maintain your inventory level
- Market your business
- Location is key
- Think of cost effective ways to advertise your business
- Keep it Simple and Focused
- Most successful people do one thing very well and don't spread themselves too thin