The US Census Bureau reports that 5.4 million new businesses started in 2021, but half of all businesses fail within the first five years, and only 35% will make it past ten years.
In many cases, new businesses fail not due to technical issues or lack of knowledge but because of a lack of soft skills, particularly in company management. For example, a plumber who decides to start their own plumbing business may fail because they do not understand how to run the business side of their company. Most businesses fail because the owners did not seek or accept help from people who understood how to build a successful business. Additionally, new business owners often fail to understand cost structures and efficiencies and do not know their numbers. They should run a profit and loss statement every month and analyze cost and profit trends in every category. Business mentors or coaches can help entrepreneurs avoid common mistakes and set up their businesses correctly. Finding a mentor or coach is essential before starting a business, and entrepreneurs should seek out successful businesspeople who can offer practical advice.
