Rates of failure among UK businesses are frighteningly high and remain relatively consistent in all but the most extreme economic conditions.
It seems obvious that businesses should expect to face tough conditions in a recession and even to go under.
Why Do Companies Fail When The Economy is Healthy?
When the economy is healthy, companies continue to fail for the same reasons as when the economy is in recession.
Companies are often unprepared for changing economic and market conditions and not geared up to cope if something goes wrong.
Many mistakes can be made in the course of running a business, that can have disastrous effects. These mistakes have very little to do with the economy.
Business success is the result of good business practices.
This is why 2 companies in the same industry can have such different experiences at the same time. One company can suffer in the same economy that an almost identical company can thrive.
58% of Start Ups fail within 2 years
96% - 98% of businesses do not last longer than 10 years
The rates of business failure are so high and so consistent that it is almost certain that a business will fail unless it takes measures to ensure that it falls within the 2 - 4 % of businesses that are run well enough to last longer than 10 years.
If Business Success is More Of An Individual Issue, How Do You Make Sure That You Succeed?
Being a well run business that anticipates and adapts to changing conditions, builds cash reserves and generates sustainable income would have helped almost every organisation that went bust in the recent recession.
A proactive business that takes responsibility for its fortunes and seeks to use the best practices and tools to achieve coherent goals will always be a success.
Sometimes this takes a bit of outside help. There are many organisations that have the knowledge and the abilty to make a real difference. Choose one that can help you to add to your own abilty to survive and thrive in any market economy.
Business Failure Rates
By George Marcou
