http://www.ritholtz.com/blog/2012/01/sm ... ure-rates/
The 2001 and 2002 data show that the vast majority of businesses closed their doors and fired employees, which any normal human can only describe as a 'failure'.
The fact that someone somewhere might have got some money out of it doesn't make it 'not a failure'.
As far as failure rates go, 30% of all new businesses fail in the first year. 50% manage to survive five.
Now on to the 'luck' thing. I'm a holdover from two owners ago at my place. The first one was a multistate entity that went bankrupt. The second was a guy who did OK, but sold the business after he had a heart attack. The new owner has seen business go up quite a bit from the 'old days', both in number of customers and profit amounts.
However, the key is that he didn't do much to alter the business, and the only real things that happened to him were a sudden influx of new people into the neighborhood that could not (and were not) envisaged five years and two owners ago. So, yes, he bought a business that wasn't doing badly, but it wasn't like he bought the business planning on a sudden influx of customers, either, because no one could have predicted that. I'd say that involves a good deal of 'luck'.
Worst Congress Ever!
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Partha
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Re: Worst Congress Ever!
Well, it’s the Super-Monroe Doctrine: “Get off our oil, people who dress funny!” - M. Bouffant
"You're a bad captain, Zarde. People like you only learn by being touched, and hard. And you will greatly disapprove of where these men put their hands." - M. Vanderbeam.
"You're a bad captain, Zarde. People like you only learn by being touched, and hard. And you will greatly disapprove of where these men put their hands." - M. Vanderbeam.
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Ddrak
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Re: Worst Congress Ever!
@Embar,
Claiming to not be using anecdotal evidence and then concluding with "from my experience..." really suggests you don't understand the meaning of "anecdotal". I am absolutely referring to the businesses that started and then shut down, which is (as measured by census data) 91%. Let's leave that alone though, seeing you want to move the scope of the discussion and head down the path you want to go down using Partha's graphic:
30% fail in the first year, 50% by 5 years and 65% by 10 years actually fail involuntarily.
I'm not suggesting failure occurs from luck. I'm actually suggesting success tends to occur through luck (and being ready to capitalize on it), while failure is the base state (65% by 10 years involuntarily) if you don't get a break. The fiction that successful people are there solely through their own efforts and unsuccessful people were dumber/lazier/smellier/whatever is simply an overbroad generalization at best and blind ego at worst.
If I had to summarize my "luck" statement in better financial terms, I'd suggest that the primary cause for failure was not having the capital developed early in the business to survive the inevitable downturns that periodically come around for reasons beyond your control.
Dd
Claiming to not be using anecdotal evidence and then concluding with "from my experience..." really suggests you don't understand the meaning of "anecdotal". I am absolutely referring to the businesses that started and then shut down, which is (as measured by census data) 91%. Let's leave that alone though, seeing you want to move the scope of the discussion and head down the path you want to go down using Partha's graphic:
30% fail in the first year, 50% by 5 years and 65% by 10 years actually fail involuntarily.
I'm not suggesting failure occurs from luck. I'm actually suggesting success tends to occur through luck (and being ready to capitalize on it), while failure is the base state (65% by 10 years involuntarily) if you don't get a break. The fiction that successful people are there solely through their own efforts and unsuccessful people were dumber/lazier/smellier/whatever is simply an overbroad generalization at best and blind ego at worst.
If I had to summarize my "luck" statement in better financial terms, I'd suggest that the primary cause for failure was not having the capital developed early in the business to survive the inevitable downturns that periodically come around for reasons beyond your control.
Dd
