Home – New Forums Money matters What Percentage of Businesses Make it Through the First 3 Years?

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  • #1190277
    ThexArm
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    It is a rather large and wide topic and there are a large number of variables to be defined in order to even to get opinions… I guess, we call anything that is trading as a business and you just can’t put a small business that is primarily trading at markets alongside of Woolworths just because both are called businesses. As you can see from the below quotes from ABS, more businesses with a employees survive longer than no employee businesses…

    I think the differentiating factor for survival of any business is the amount of capital, energy and passion invested in a business by the owner…

    Just to go a bit further into what Bert had supplied to this thread….

    Statistics like 50% survival or 90% attrition is crazy… It adds no value and probably scare people away from starting a business….

    Just looking at the ABS statistics –

    “There were 2,100,162 actively trading businesses in Australia in June 2014”

    “Construction had the most businesses operating in Australia in June 2014”

    “Electricity, Gas, Water and Waste Services had the fewest businesses operating in Australia in June 2014”

    “Accommodation and Food Services had the highest business entry rate in 2013-14”

    “Most businesses actively trading in Australia in June 2014 were unincorporated businesses owned and operated by the household sector”

    “The household sector had the highest exit rate in 2013-14”

    “Non-financial corporations and financial corporations were more likely than household sector businesses to survive from June 2010 to June 2014”

    “Financial corporations that started operating in 2010-11 were the most likely to have still been operating in June 2014”

    “The business entry rate was highest for sole proprietors in 2013-14”

    “In June 2014, 61% of actively trading businesses in Australia had no employees, 27% had 1-4, 10% had 5-19, 2% had 20-199, and less than 1% had 200 or more”

    “Among businesses operating in both June 2013 and June 2014, there was net movement away from having 1-4 employees in June 2013 towards either having no employees or having more than 4 employees in June 2014”

    “The more employees an ongoing business had in June 2010 the more likely it would survive”

    “For a business that started operating in 2010-11, the more employees it had the more likely it would survive”

    “In 2013-14, business entry and exit rates were highest for businesses with no employees”

    after looking at staistics like this then you start to wonder, whether you want to spend your energy on “what percentage of businesses…” or “what kind of businesses….”

    #1190278
    alliedib
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    I think we are on topic and the responses are relevant.

    I doubt anyone can give a completely ‘non-ballpark’ figure – there are just too many variables. Even if you can come up with empirical data, it is open to interpretation and, even then, it does not tell the full story. There are plenty of examples above which I don’t need to rehash.

    Speaking of my business clients, I can count on both hands the number of policies cancelled due to the business ‘ceased trading’ – as I specialise in insurance for New Business startups most of my clients are ‘new’. I would probably say 85% of my clients that started 3 years ago are still around – does this mean 85% is reflective of the overall figures? Not at all.

    Regards,

    Mark

    #1190279
    Jason Ramage
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    Paul Peace, post: 223463, member: 54653 wrote:
    I can’t make sense of this. Would it be okay to stay on topic?
    What Percentage of Businesses Make it Through the First 3 Years?

    Wow, that hurt.. Although i do think they are on topic, even my off handed reproach to the assessment of stats and how they can be skewed as per Mark’s informative input – which is also extremely relevant…

    Although i will keep your analytical debate free from clutter that may also align with some others.. Maybe also sign up to IBIS statistics as they also have a large array of data from multiple fields that can be used in many ways.. There is a cost to this, although if you know a good business banker you may be able to ‘encourage’ them to assist you in acquiring said reports..

    Hope that wasnt too far outside a spectrum of understandability…

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    #1190280
    Jason Ramage
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    Paul Peace, post: 223463, member: 54653 wrote:
    IWhat Percentage of Businesses Make it Through the First 3 Years?

    To answer your question though.. i think 100% of all businesses trading after 3 years have made it…

    Also, i am a little intrigued about this whole post.. Your website or blog is already advising its readers that only ‘1 in 2 businesses survive the first 3 years’ – are you planning on modifying your blog based on new research you are conducting?

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    #1190281
    GuestMember
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    I was referring to a single, obscure (to my mind) post. Thank you to all who have contributed.

    Yes Anon Bourgeoisie? Harry? I’m interested in presenting the facts on radio and my blog. If I can’t bring it to closure around another figure, I’ll stick with my previous figure (which at present is in line with the govt stats).

    I can’t go into great detail on the hundreds of variables. Radio is a place for soundbites. Presenters are in constant fear of losing their audience.

    I can’t speak in riddles on radio or have fun when people’s livelihoods and communities are at stake.

    I can’t talk anecdotally about particular business’s experiences, even though I’m interested in those; I have to be factual and go on aggregate data.

    We can have a pop at statistics but I doubt there is a better method of ascertaining and communicating the business landscape.

    I’m neither there to make it more comfortable for people considering going into business, nor to scare them, but simply to present, to my best ability, the facts.

    Ultimately, I do have to arrive at a figure that I can say with conviction. Sure, I’ll know there is finer granularity to it but the audience needs at least a first approximation on the landscape, a starting point from which they can attach the ifs, buts and maybes.

    #1190282
    Jason Ramage
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    well if that is the case and you merely need to present a figure that is cement in some eyes, i would go with anything from the ABS as has been mentioned more than once or enrol with IBIS World – 2 fantastic avenues for anyone wanting statistics broken down into whatever method you require.

    Sounds like you may already have your answers though.

    I can imagine its hard to go into great detail in fear of losing audiences..

    I can imagine riddles cause grief on radio and you cant have fun

    I can imagine factuality is more relevant.

    Whatever figure you pull out of your hat (from the resources available i mean) if you say them with conviction you will be ok :)

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    #1190283
    bb1
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    Paul Peace, post: 223463, member: 54653 wrote:
    I can’t make sense of this. Would it be okay to stay on topic?
    What Percentage of Businesses Make it Through the First 3 Years?

    I’m confused, everything here seems on topic to me.

    #1190284
    GuestMember
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    Bert, examples:
    “Humidifiers”, “scientology”, “Berty Beetle, I know this is not related to this post, albeit…”

    “I can imagine its hard to go into great detail…” “I can imagine riddles…” “I can imagine factuality…” Huh? Fogging due to perceived trouble?

    It’s just a fact. It was off topic. We can continue the main purpose of the thread or stop of and debate the relevancy to the topic, whether conversation indeed needs to be on topic, and whether I was right to raise it. But personally, I’d prefer to move on. I was enjoying reading all the different views and taking note of the resources people had shared.

    #1190285
    Rowan@quaotic
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    I’m sorry that you feel that those responses were off topic but they are just as relevant as your question. There is no way of saying how many businesses are successful or continue after three years and I realise you are having trouble with that concept. You can go with the government figures but anyone in small business knows they are just numbers that mean anything you want them too, they are not close to correct simply because the surveys are very limited and don’t take all the factors into account.

    #1190286
    GuestMember
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    They did say themselves they’ve been off topic. The discussion has been interesting. For me, the pointers to aggregate statistics from more authoritative sources are a great takeaway.

    #1190287
    Jason Ramage
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    Maybe pay a statistician to conduct relevant reviews of said statistics to validate your topic of interest… Just because something is not a direct answer, doesnt mean its irrelevant..

    Jason Ramage | Lucas Arthur Pty Ltd | E: hello@lucasarthur.net.au   P: 61 3 8324 0344    M: 61 412 244 888
    #1190288
    GuestMember
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    That’s correct but not what I said. Shall we move on?

    #1190289
    bb1
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    It’s interesting, just thinking back to a member who I believe has given a lot of valuable information to business’s over the time I have being on here, but has drifted of the forum of late, quite some time ago said to me (I paraphrase a little).
    people pay 1’000’s of dollars for this valuable service (statistics) – what does one expect from a free forum.

    And I think that’s the issue here, you are expecting a forum to give you contrary advise to that which has being tendered by the ABS, ABR and ATO. Well if they can’t get a figure exact, and I suspect they pay millions, not sure what you are expecting from a small business forum. A thing I have said before ask ten people and you will get 24.75 different opinions.

    #1190290
    bb1
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    Just thinking on this some more, there is one marketing/training firm quoting an 80% failure rate in 18 months. If you are going on the radio with figures wouldn’t it be better to use verifiable figures, than figures more suited to a sales pitch.

    #1190291
    GuestMember
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    Yes, that’s what I’m looking for, many pointers to the facts. We’ve already had some great contributions. I feel sure there other organisations that will have conducted research. Thanks Bert.

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