In the 1970s I knew a guy who made a lot of money off hubcaps. He knew a guy who made a lock for the expensive Cadillac spoked-hubcaps that were being stolen. My friend invested $5,000 to help market this small business product to GM. As expected, GM refused to entertain a small business idea. So, my friend went to the auto insurance companies. The small business became an instant goldmine.
That of course is one small business success story against millions of small business failures. But are small business start ups disappearing? According to Jan Norman and US Census Bureau, they are. The studies say that the starts ups (in general) have declined from 13% of all US companies in 1980 to 11% in 2006. Companies that are less than 5 years old have decreased from 50% in the 1980s to 35% in 2006. Lastly, young companies used to account for 1 in 5 jobs. Now, 1 in 8.
Obviously, in the biggest economic downturn since the Hoover Depression, small businesses will took a big hit. Many small businesses just don’t have the capital to weather a storm. But does this mean that we are losing our entrepreneur spirit?
I would challenge the article on that point. As a CPA firm, more and more business plan opportunities are coming through our door. Entrepreneurs grace our presence with investors who want some sort of business plan or strategic plan for their new idea or small business. If you want to know more about setting yourself apart, read one of my earlier articles:Changes:Bowie Was Right, Look Out You Rock n Rollers. The article advocates the creation of smaller strategies instead of one big one.
So, are startups failing, or are new business people just choosing more carefully what they should invest their time and money into? Remember, back in the 1980s and 1990s, credit was rampant. People maxed out their credit cards and credit lines.
Now, those sources are not as available.
Don’t shy away from your dream. Strategic planning is the key word to vision, and a business plan is the necessary tool to implementing it.