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General

The Small Business Opportunity

 

How did the self-made millionaires make their money?

74% made their money with their own business.*

10% made it as highly paid executives in the corporate world.

10% made it as professionals (doctors, lawyers, etc.)

5% made it in sales.

1% made it in miscellaneous ways.

* Includes real estate as a business.

 

Since 1950 there has been a steady increase in the number of Americans starting their own business.

 

In the year 1950, only 93,000 new corporations were created in the U.S.  In the 1990's the rate ran well over 700,000 per year.

 

Some experts estimate that by the year 2012, 70% of U.S. workers will be self-employed. 

  

THE PROBLEM

 If history continues to repeat itself .........

33% of new businesses will fail within six months.

75% of start-ups will shut down within five years.

90% of businesses operating today will eventually go out of business.

 

WHY THE HIGH FAILURE RATE?

 

The fatal assumption of many prospective entrepreneurs is that if you understand the technical work of a business, you understand a business that does the technical work.  These are two totally different skills, and many do not realize that until it's too late.

 Causes of Business Failure

 

Inadequate Sales....................................39.0%

Competitive Weakness..............................21.2%

Excessive Operating Expenses...................11.2%

Collection Difficulties..................................9.3%

Inventory Difficulties...................................4.2%

Excessive Fixed Assets.................................3.6%

Neglect..........................................................2.8%

Poor Location...............................................2.6%

Disaster.........................................................1.4%

Fraud............................................................1.2%

Other............................................................1.4% 

Reason Unknown.........................................2.1%