The economic crisis that is currently playing throughout the world has left plenty of with doubts on whether starting a small business can work during this time. The current state of the economy has led to failures that plenty of are facing within larger corporations, as well as within the smaller arenas. Understanding the percentages of small business success and failure during this time can give you a better idea of whether this is the time to jump in to your own work as a business, while helping you to combat against the threats that are growing within the economy. Click here to about fundraising in a poor economy.
The main way in which small business growth or failure is calculated is through bankruptcy that is claimed each quarter. Typically, these come from sole proprietorships, which are based off businesses that have less than 500 employees and that function as small businesses. Since 2006, the number of businesses that have claimed bankruptcy has been steadily rising. Beginning in 2006, this was at an average of 21,000 bankruptcies within the year. This slightly rose in 2007 to an average of 24,000. This doubled in the year 2008, with 50,000 bankruptcies claimed within the year.
The rise associated with the recession is five that is still being linked to the main concept of businesses management skills as well as ability to reach a larger target market. Even though 92% of businesses have less than 500 employees, they only account for 39% of the sales that are in the market. Because of this, only 18% of small businesses will make it to the 10th year of operation. In recent statistics, it’s been shown that the top reasons for failure include management and the ability to manage finances because of the recession related obstacles.
If you are considering starting a small business or trying to operate during the recession, there’s a few of ways that you can combat against these statistics and be a part of the 18% that thrive. The first ideal is to make sure that you are managing your business effectively and consistently to beat the statistics. This can be done by constantly addressing market fluctuations and employing appropriate business strategies. Secondly you can address your expenses and find which ones can be scaled down while still meeting your business needs. It’s recommended that you save an average of 20% of your sales. If the recession gets worse, then you can regain your momentum by using these savings to survive on a monthly basis or to recover after the recession slows down. By doing this, you can effectively move past the financial woes that are currently taking over the economy.
For anyone that is thinking of starting or expanding a small business needs to do the proper research. This includes looking at current statistics and understanding the potential difficulties of a small business in relation to finances and evaluating the economic situation. Even though the recession is continuing, you can start your own business and work toward growth with the right plan and initial steps to lead toward your success. Click here to read about doing business in Wyoming