Wednesday, January 12, 2011

60% of businesses will FAIL within the first 5 years!

Really?'s that risky to start your own business? Internationally recognised academic and award winning writer David Storey, says its fact and not theory.

The Entrepreneurship Forum
Let's go back a few steps. Monday morning at the 10th international entrepreneurship forum held in Manama, Bahrain. Sat in between the gulf's leading businessmen, anxiously waiting to hear the secrets of success in the business world.

David Storey, the first speaker of the day takes the floor. His bio speaks for itself, amongst many things he consults european governments on their business and economic policies. What does that even mean? still, sounds very cool.

So he starts with mentioning that the majority of businesses will fail within the first five years (after studying thousands of business across Europe and the US) and here's why:

  • Fast growth rates are very rare
  • The ever growing presence of financial constraints 
  • Changes in sales and profits in new businesses are immense
  • Firms in the past has shown they're more likely to contract than expand
  • 60% of firms started between the years 2000 to 2005 ceased to trade
  • Human capital and prior business experience failed to prove higher success rates
And the list goes now im starting to think, I did not sign up to hear THIS!

Being Optimistic and lucky
David is a firm believer in the role of luck in business. He says ''Good businesses often don't survive''. Adding that you can do the right things and fail, and can do the wrong things and succeed.

He then goes on saying ''Business survival depends on chance and optimism.....surely it's not all luck? Clearly not but there's a big chance element in success''.

Getting rich isn't that easy after all
Looking at the bright side of things. It was probably worth being bombarded with his words. We need to be reminded of the risks involved in business, and continuously plan and strategise in advance.

Unlike economies in the western world, Bahrain's economy is still developing with lots of opportunity in different sectors of the market. Also, its probably less risky to start a business here, especially when you compare the competition in developed and mature markets.

Go for it!
So if you have a business idea, the right plan and resources, then go for it (check out Tenmou). They say a real entrepreneur takes the risk and doesn't let it get to him. I bet David isn't a risk taker after all.

Thank you for reading,

Member of the ClassicArabia Team!

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