We provide strategy services to startup companies, but not to just any startup company.
Over 500,000 new businesses are started each month. About 88% of these startups do not and will not have any employees. These non-employer startups may be lifestyle businesses, investment vehicles, contract service providers or some other type of solo-preneur business.
If this sounds like your startup, you’re in good and growing company. We’ll have more to say about this trend and something concrete to offer soon. Right now though, the simplest way we can help is to help you answer this question: Is Your Business a Holy Ride Yourself to Know?
Smaller businesses have a greater risk of failure
That leaves over 729,000 thousand businesses employing from one to 250 employees that are started each year. Your goals may or may not include the long term. You should know though, if you don’t already, that 30% of these will fail within two years, with around half surviving five years and just a quarter surviving 15 years.
Further, 2012 US Census data show that the establishment exit rate is more severe the smaller the firm. 16% of firms with one to four employees “exited” while only6% of firms with five to nine employee firms failed. The numbers get better the larger the firm:
- 5% of ten to 19 employee firms –
- 4% of 20 to 49 employee firms –
- 3% of 50 to 99 employee firms –
“Exited” – that is, failed.
The advantages of size are more apparent when you consider that:
- 73% of the 630,000 business exits were by companies with one to four employees –
- 13% of exits were by companies with five to nine employees –
- 7% of exits were by companies with ten to 19 employees –
- 4% of exits were by companies with 20 to 49 employees –
- and, just 1% of exits were by companies with 50 to 99 employees –
What we do is help startup businesses survive and grow quickly and profitably.
Strategic Focus and a Coherent Business Model
We can help your startup with strategic planning and tactical execution. This includes design and implementation of time-saving, cost-effective systems and organizational structures. We can advise and execute as needs and cash flow dictate.
If your company is just at inception or very early stage, you in all likelihood are still in proof of concept. If you’re a bit further along, you may be self-financing operations out of pocket or through personal credit resources.
Our advice is to fund these early efforts through customer receipts prior to seeking any outside financing.
The fact is that less then 10% of startups receive any sort of angel financing and only 1% of startup ventures receive venture capital funding.
If you’re already on track with an angel or a venture firm, then you certainly don’t need us.
However, when the time is right – if it is ever right – to get external financing, we can put together the financial package lenders and investors expect to see. We can even present it with you.
- Kaufman Index of Entrepreneurial Activity, 1996-2012, Robert W. Fairlie: “[There were] approximately 514,000 new business owners each month during 2012; [there were] 543,000 in 2011.” P.2.
- United States Census Bureau: Establishment Characteristics Data Tables.