Running a small company can be a pretty scary business. The odds of succeeding are certainly not in the owner’s favor. Here are 7 scary statistics and what you can do to beat the odds.
- 55% go out of business. Depending on the industry, only 45% of start ups are in business after 4 years. In the information services business, the survival rate is only 37%. How to beat the odds: Focus on customers who have the pain your company solves. Stay in an industry where you have relevant experience. Watch your cash flow monthly.
- 78% of all small businesses have no employees. Most companies in the US are just single people and can’t afford to hire additional employees. How to beat the odds: Build a company, not a job. Hire people that can to do tasks that can leverage your valuable time.
- For every month that a company does not communicate with their customers, they lose 10% of their influence. Most companies only talk to customers when they want to sell them something. How to beat the odds: Set up a systematic marketing plan that automatically sends information of value to customers to reinforce your brand.
- The average company loses 50% of its customers every 5 years… the cost of replacing them can be 6-7 times more expensive. Most companies are too busy trying to get new customers to come in the front door that they let existing ones leave out the back door. How to beat the odds: Provide amazing service so customers have no reason to leave.
- Executives waste 7.8 hours each week in meetings. Small business owners have far too many meetings that are not useful to the company. How to beat the odds: Never enter a meeting without an agenda, a time limit and action items. Not sitting down will also keep the meeting shorter.
- 91% of the customers say they’d give referrals — but no one ever asks. The company never asks satisfied customer for their help in finding people like them. How to beat the odds: Annually, ask satisfied customers for at least one referral. It can also be put in a service contract as part of the fee!
- Average compensation for an owner is $82,257. While this may not seem that low, remember that their average debt is almost 50% higher than the ordinary consumer. How to beat the odds: Watch gross margins and fixed expenses. Don’t forget to pay yourself along with other employees.
What is the scariest business statistic you know?