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How many small businesses fail?


by on 14/02/07 at 4:57 pm
3 comments


Everyone knows that 96% of small businesses fail within 10 years, and that stat can probably be traced back to Michael Gerber’s very successful book, “The E-myth”. Of course, 76% of all statistics are made up on the spot, but for some reason we blindly believe whatever we read. Gerber wants to paint a grim picture of the doom facing business owners so that more people will buy his book to find out how things are supposed to be done.

On the other side of the fence sits FNB, who are launching a new “product” (which is bank-speak for brochure of bank charges with a fancy sounding name at the top) aimed at small business owners. Naturally they want hoards of people to start businesses, get in to lots of debt, and become their slaves for life, so they are telling everyone that the success rate for small businesses is not so bad (apparently 40% make it), and that everyone else has got it wrong. Mmmmm, of course they have.

Read the press release here.

Andrew Smith is the pedantic systems guy behind Live Alchemy, a SA e-commerce company. Andrew writes for Ideate in an attempt to make the world a more efficient place. View more articles by Andrew Smith.

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3 Responses to “How many small businesses fail?”

  1. Karin

    Feb 14th, 2007

    Both (Michael Gerber’s and FNB’s claim) need a healthy dose of sketicism:
    http://kentblumberg.typepad.com/kent_blumberg/2007/02/healthy_skeptic.html

    I’ve also tried to (re)locate an article I only read this week that in the UK 3 out of 5 new businesses now survive the first five years (but I’m getting older and can’t for the love of my life find that article!, so can’t state the source or claimant!).

    You do know there are three types of lies:
    true lie
    white-lie
    statistics
    ;-) ;-)

  2. rockytop97

    May 4th, 2007

    I believe if you focus on building a business and not a job then you’ll be alright. Focus on the business and less on the job.

    “Do you own your business or does it own you”
    http://rockytop97.wordpress.com/do-you-own-a-business-or-does-it-own-you/

    Rockytop97

  3. alex cabaka

    May 9th, 2007

    Hello friend,
    how are you iam sir alex cabaka from West Africa Accra Ghana i need so body i can trust in good business,
    God Bless you.

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