I was reading the UW business plan competition website today. They’ve been doing it for 15 years, had 992 teams submit plans. Over those 15 years — 45 businesses are still in business. A whopping 0.42%!!
If we just use the “Sweet 16” businesses over 15 years — the finalists — as the base, then 18.8% are still in business. I bet if we did a temporal regression on this, the numbers would be even worse.
Case Western Reserve did a study of going startups a while ago. The professor there concluded that 10% of business do not go out of business within 5 years( aka 90% fail ). 31% if it’s a food business. In other words — restaurants are the most likely to succeed businesses.
UW business plan competition is mixed — some restaurants, some tech start-ups, etc… It seems that 0.4% is the chance that your idea will become a viable business, and if you do start a business from the idea, about a 20% chance the business will not fail in 5 years.
I was watching a commercial for an invention help line. This was a company that would take your invention, and help you get a patent and get it onto store shelves. They showed off a success story. They had a disclaimer at the end of their ad, “Results not typical”. Just like a weight-loss ad…
Something to think about…