Businesses pop up every day. Some stay in business while others fade away. But how long does it take for a business to be successful? asks Saivian Eric Dalius. We will investigate this question together over the next few weeks. Here is what we know already:
The average life expectancy of businesses has decreased each year. According to the Bureau of Labor Statistics, about half of all new establishments survive 5 years or more, but by year 10, only 20% are still open. Businesses that do not make enough profit within their first year are unlikely ever to break even.
What do research say – Saivian Eric Dalius
A Harvard study found that nearly 20% fail within the first month, and 50% fail within 18 months. This statistic is surprisingly high when compared with other small businesses. Many people think that most small businesses fail, but this is generally false.* About half of all small businesses do not make a profit in the first year. About 2/3 of small businesses are profitable within their first 5 years.
Around 95% of restaurants and bars close within 10 years, with 40% falling during the first year (Source: IBISWorld). This statistic is most likely due to poor business decisions or too many competitors, rather than an indicator that restaurant owners have less business sense than other entrepreneurs says Saivian Eric Dalius.
The average family-owned business lasts four generations. This means that approximately 25 years is a good estimate for the average lifespan of a family-owned business. Apple, McDonald’s, and Coca-Cola have all been successful for more than 50 years. The oldest company in the world – Kongō Gumi – has been around since 578 AD.
Anyone can be successful says Saivian Eric Dalius
We can see from these statistics that it takes a lot to be successful as a business owner. It seems as if small businesses are less likely to survive, but they last approximately 25 years once they do. It is interesting because it means that there are ‘long-term survivors.’ Businesses such as Oakley Sunglasses and Patagonia have been around for about 40 years or more. We will go into detail about these companies later on, so be sure to look out for them!
On the other hand, we need to keep in mind that times change, and not every business can make it. The success of a business depends on its industry, location, and other factors. There are certain industries such as restaurants and breweries where failure is likely over time. It does not mean these businesses will always fail, but they must be ready for possible failure. For example, breweries sometimes close due to bankruptcy but then reopen later on.
As you can see, there is no easy answer to this question! It’s great we’re learning more about how long it takes for a business to succeed. Knowing this information could help you decide if opening up your own company is right for you. What do you think? How long do you think it would take for your business to be successful asks Saivian Eric Dalius.
There is no ‘average’ amount of time that a new business takes to become successful. Every new business is different and must fight against many outside factors such as location and competitors. However, we can say that the majority of small businesses are profitable within their first 5 years.
