It’s the end of the year, and the end of the decade.
More than 6 million businesses start each year in the United States. The majority of those businesses will close over time, with 25% or less lasting for the long haul.
Over time, the odds of your business surviving look like this:
80% of businesses will survive their first year in business
70% of businesses will survive their second year in business
50% of businesses will survive their fifth year in business
30% of businesses will survive their tenth year in business
And only 25% will last 15 years or more.
So how do you increase your odds of success? The first step is knowing your business – and specifically the challenges of your own industry.
The above estimates include all types of companies across the boards, but some industries are stronger than others. For example, health care companies tend to last longer, with 60% making it through year five. Construction companies pose a greater risk, with only 35% surviving to that five-year mark. Knowing the challenges of your industry can help you prepare to navigate the difficult stretches and capitalize on the golden times.
Knowing your business also means understanding what drives the machine, including:
- What services or products bring profit, not just revenue?
- Can you efficiently drive new customers, and at what cost?
- How does your business grow and scale?
- Where is your competitive advantage and where are you at risk?
- How do you identify and capitalize on opportunities when they occur?
These questions are worth exploring every year, if only to ensure the resources you have in place to address them are still working and are still relevant.
The next step is planning. While the majority of business plans may get left on the shelf indefinitely, it is a rare company that succeeds long term without some level of planning and structure. When circumstances change, a company that knows where it wants to go and has a strategy to get there is much more likely to arrive at a good place than one flying by the seat of its pants. To put it another way, if you don’t see the train coming, you’ll be making last-second plans to get out of the way. But if you see it off in the distance, you can prepare, and ride it into the sunset.
In a good economy, a company must take advantage of the opportunities that come its way, in addition to doing whatever it can to create more opportunities for growth. It’s also the time to prepare for what lies ahead, and to remember that recessions are a cyclic beast in the offing.
We are here to help you explore these vital questions, look at your numbers and develop plans to get your business to that next milestone, be it surviving year one or transitioning your company to the next generation of leadership for decades to come.
The first step is a Business Analysis to see where your company stands, and help establish a footing for where you want to go. From there, we can help you implement best practices related to product development, marketing and brand strategy, personnel, financial models and more.
I hope that what 2020 holds for your business, is nothing less than its best year ever.
Let us know if we can help you get there.
Yours sincerely,
Matt Bartilson
CEO, Unboxed Horizons