Do 80% of new businesses really fail in 18 months?

There’s a stat that gets misquoted that 80% of small businesses fail within the first 18 months of operation

(and, yes, I’ve misquoted it myself before I checked!)

That can, apparently, be traced back to a 2013 Forbes article that quoted a Bloomberg study that nobody seems to be able to find

(in fact, it appears that the author of the Forbes article was, surprise surprise, a business startup expert – i.e. selling something)

The picture is far more complex than the simple statistic, official sources suggest instead that:

• 22% close within 1 year
• 49% in 5 years
• 65% in 10 years

In fact, 5-year survival of around 50% has stayed pretty consisten across cohorts tracked since 1994

(a period that includes the dot-com crash, great recession and COVID-19 pandemic)

So, what can we learn from the stats, particularly when it comes to starting your own one-person consultancy?

Well, first a little disclosure – I’m 16 years and counting into this journey of View Beyond which a) means I’m on the high end of the curve; and b) I consider myself very fortunate

(because I walked into this without very much of a plan at all after leaving Pfizer)

And, while View Beyond has never been fully at risk of closure, year 7 was a doozy – more of which below.

I think the major problem people have, particularly when leaving a corporate role to go solo, is the understanding of what they’re actually doing. You see, when you work in a corporation, you can sit at your desk, and work will just show up. It’ll happen – try it some time. When you fly solo, however, at some point you’ll learn that work doesn’t show up unless you make it show up

(yup, that was year 7 – a baptism of fire, for sure)

And it gets worse. Work shows up in corporate, generally, because you’re good at what you do. As a solopreneur, you’re in a market flooded with people who are good at what you do. Work only shows up because you influence people to choose you over A. N. Other Consulting.

Said differently, you have to sell the sausage, not how it’s made.

And, eventually, you learn that you sell to emotions, not front-brain logic. You sell to pain-points and to pleasure-points. You sell the solution to either or both of those things. So, if you don’t know where your potential clients hurt or hope, you’re not going to hear them beating a rapid path to your door any time soon

(7-year me says “get used to the sound of the wind and tumbleweeds…”)

Thankfully, there are some things you can do to help you get ahead of your own curve.

First, download this PDF: 5 Steps To A Solid Side Gig. While it’s framing is side-gig, the steps apply to any new business start-up.

Second, to go a bit deeper, there’s a free recorded training in the Learning Center that goes through a very specific exercise you can use to enhance your planning:

So, you want to start your own consultancy? 3 things you need to know before you do anything

(and yes, I talk about year 7 in that training!)

Having had the journey I have over the past 16 years, I’m the very last person to say that going solo is easy. It isn’t. But I wouldn’t have it any other way. If you’ve been considering it, and the resources above help, I’d love to hear more of what you’re thinking and, if I can, help you become part of the 50%.

Speak soon,

Quick question

I’m thinking about adding a group call to discuss themes in the Making Change Real newsletter. These would fall in the week following publication, and be via Zoom, 30 minutes of presentation, 10-15 minutes of discussion. There would be a small charge to attend (likely $9 per month, waived for current coaching clients)

Would you be interested in joining me?