That business isn’t dead, it’s just resting

Monty Python – The Parrot Sketch:

Mr. Praline: I’ll tell you what’s wrong with it, my lad. ‘E’s dead, that’s what’s wrong with it!

Owner: No, no, ‘e’s uh,…he’s resting.

Mr. Praline: Look, matey, I know a dead parrot when I see one, and I’m looking at one right now.

Owner: No no he’s not dead, he’s, he’s restin’! Remarkable bird, the Norwegian Blue, idn’it, ay? Beautiful plumage!

Mr. Praline: The plumage don’t enter into it. It’s stone dead.

Owner: Nononono, no, no! ‘E’s resting!

With all of the bad news floating around, I thought it might be worthwhile to do a quick review of what small business failure rates look like.

Small Business Failure rates continue to be a really hot topic – especially on the Internet and (unfortunately) in marketing for certain products and services.  But what’s the reality – and if you’re a small business owner, is this useful information?

What’s actually going on with Business Failure Rates:

Here’s a link to a recent blog post that I think is pretty credible: Startup failure rates.  You will hear people say that 50% of businesses fail within 2 years – sometimes it’s even more dire.

As you can see from the chart in that linked story, 50% of businesses are still around after 4 years – that’s still a rough go of it, but not nearly as bad as some make it out to be.

Additionally, the definition of failure is a little questionable – some studies have shown that 30% of closures were not viewed as failures (retirement, merger, etc.).

Finally – if your interested in more in-depth detail, here’s a link to an SBA study that matches up to that posted data fairly well: SBA Study

What do you think?  Is this kind of information helpful?  As a small business owner do you think about it much or are you pining for the fjords?

Shawn Kinkade

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