Today in Global Small Business: The Future of the Norwegian Startup Ecosystem


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What’s affecting me, my clients, my colleagues and other global small business owners:

Global Startup Ecosystem Report


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Europe leads in the “number of top growing ecosystems across phases,” says a recently released report Startup Genome’s 2019 Global Startup Ecosystem Report.

The Global Startup Ecosystem Report is “based on primary and secondary data from over 10,000 founders and more than one million companies across over 150 cities worldwide,” according to the authors, Startup Genome and the Global Entrepreneurship Network.

Amongst the top 10 global startup ecosystems, Paris and Berlin have the least amount of female founders.

Four key takeaways from the report:

  1. Paris and Berlin to step up female entrepreneurship
  2. Frankfurt’s Fintech focus
  3. Blockchain in the Balkans
  4. Keep your eye on Helsinki

Read more about the takeaways from the Global Startup Ecosystem Report.

To Succeed at Business You Need a Startup Mindset

Scalability, innovation and disruption come at a high cost.

6 min read

Opinions expressed by Entrepreneur contributors are their own.

Startups are born to scale. They’re created to search for and validate a scalable business model in a way that can have a major impact on the market or how a problem has traditionally been solved. The innovation, disruption and scalability aspects of a startup are why they are different from small businesses and more importantly, why they can’t be treated or built as a small business or subversion of a large company.

Small businesses are created to generate profits and secure local market share. Although small businesses also have the potential to grow into large companies, the driving force behind their growth is national and international expansion through larger teams, supply, manufacturing and distribution channels. When WhatsApp was acquired for more than $19 billion, it only had 55 employees. Instagram, YouTube, Viber, Skype and Tumblr had 13, 65, 50, 911 and 178 employees, respectively. Technology is an enabler, and the reason startups can scale so quickly with a repeatable business model and a tiny user to employee ratio unlike small businesses.

For example, certified public accountants run a small business, and the core of their service is provided by them or their team. Although technology helps them do their job or save time on repetitive tasks, they cannot serve a client without investing time to review and complete their tax returns.

Related: The Rules for Leading a Navy SEAL Team Are the Same as Leading a Startup. I Know, I’ve Done Both.

On the other hand, startups like TurboTax have created a scalable platform that enabled them to serve hundreds of thousands of people without needing the same number of service providers. A scalable business model powered by technology enabled this startup to grow exponentially at a pace a small or medium sized business cannot match without investing a lot of resources.

Scalability, innovation and disruption come at a high cost. While around 50 percent of small businesses fail in the first four years, 90 percent of startups don’t make it and for those that do, several encounter near-death experiences along the way according to a Startup Genome study.

Thankfully, several startup and product development methodologies have been introduced to provide entrepreneurs with frameworks to alleviate risk of failure and boost startup success predictability while minimizing costs, whether it’s time or money. Many of those practices can also be applied to start and grow small businesses. Here are two ways a startup development mindset can help you start small businesses on stronger foundations.

1. Leverage existing resources.

As opposed to small businesses, which typically execute on proven models, startups are created to search for a repeatable and scalable business model. As such — and following the dot com crisis that resulted in massive failures due to startups investing hundreds of millions of dollars under the assumption that their business models are validated — several principles were introduced to help startups alleviate risk, validate ideas quickly and build in response to demand instead of based on inaccurate projections.

The lean and agile development methodologies entail implementing an iterative process that starts by validating customer needs and expectations qualitatively through interviews followed by small and quick product version launches to test quantitatively and continuously instead of investing significant amounts of time and money building an advanced product, risking that no one need it or want to use it the way it was originally hypothesized.

In our example above, an entrepreneur is better off testing if people are willing to trust a software to do their taxes. Creating a simple landing page where users are prompted to submit their tax information, thinking that their returns will be processed automatically when in reality, the founder is manually running the numbers in the backend and then sending a clean report, is an example of an MVP that can be executed quickly and inexpensively while providing valuable information about user needs and expectations.

Related: These 5 Skills Are Critical for Success and Career Advancement

How is this relevant or applicable to small businesses? Most small business owners fail to start due to lack of cash. Execution is often delayed until the envisioned business is created to perfection whether it is a restaurant, car wash, a logistics company or hair salon. Adopting a lean approach to starting small businesses entails leaving the biggest expenses for last, using existing resources and focusing on getting the job done. In the case of a restaurant, it could be using your own kitchen and vehicle to deliver. Start a car wash business on demand before buying all of the expensive equipment and leasing a commercial space. Follow the same approach to start a hair salon or a logistics company, one truck at a time.

Aspiring entrepreneurs understand the fact that they may have to start from zero. Real entrepreneurs start below zero.

2. Sell first, build next.

It is often believed that a product must be good or unique enough for a business to exist. The truth is, what entrepreneurs poor blood, sweat and tears in to build to perfection today, is often mediocre when evaluated a few months later. The idea of building a perfect version of the product or service before offering it for purchase is flawed.

By combining the lean principles shared above with presales, founders can significantly minimize business risk since they will build in response to demand, with higher certainty. While the product may later fail to meet buyer expectations, its value can be validated quickly with financial commitments.

Researchers and consultants Homayoun Hatami, Candace Lun Plotkin and Saurabh Mishra found that companies that presell their products achieve above average customer acquisition and retention rates of 40-50 percent and 80-90 percent, respectively.

No matter the product, several marketing campaigns can help you execute a presale strategy. However, since you are selling a promise, prospects will be investing in you, therefore, personally meeting your ideal buyers, showing your passion and seriousness in addition to samples or a prototype is how you will be most effective in preselling your idea. Paul Graham, investor and co-founder of Y-Combinator once said, “it’s better to have 100 people that love you than a million people that just sort of like you.” Find your 100 big fans even if it takes meeting them one person at a time. Those fans will help you build a better version of your product, provide you with testimonials and 10X your reach as they invite others to buy from you.

Related: How to Turn Your Good Idea Into a Great One

Business funding has long been considered the only fuel of business initiation and growth. Not anymore. Nowadays, serious entrepreneurs can start small businesses and startups by focusing on getting their customers’ job done or problems solved by leveraging existing resources, preselling the idea and delivering value through non-scalable approaches.

Launch a Startup Today Using These 4 Tips

In 2019, there is more opportunity than ever to launch a brand new startup business, and this is definitely something you should consider. There is so much that can impact a new business, and becoming an entrepreneur is something that is becoming more and more popular among people. So, if you are serious about being able to launch the right business, you need to make yourself competitive.

Launching a startup

So many new companies are formed every year, and so many of them fail because they don’t get the basics right. There are a lot of things that you need to keep in mind these days, and making your business better is certainly something that requires a bit of work. Make sure you look at what it takes to launch a successful company, and keep these things in mind right now.

1. The Perfect Business Plan

The perfect business needs the perfect business plan, and this is something that you need to make sure you get right as much as possible. There are a lot of things that play a part in helping take the company forward, and this is one of the best ones. There are so many things that you have to make sure you get right moving forward, and crafting the perfect business plan is something you need to get sorted as much as possible.

2. Business Loan

Make sure you do as much as possible to secure the best possible business loan you can for the business. This is going to be essential when you are looking to move forward, and you have to make sure you think hard about the different ways of securing the right business loan for the future. Head to A1 Business, and check out the accounting services they offer – these will help you take better care of your money, and understand the sort of business loan you need.

3. Marketing

You have got to make sure you do as much as you can to improve the marketing of your business moving forward. The way to achieve success as a modern company is to have a strong marketing strategy, and this is something that you need to look into moving forward. A company like Mandreel would be the ideal choice to take charge of all your business marketing needs, and look at what you can do to improve the way your business comes across.

Online marketing metrics

4. Your Website

No modern business would be complete without the right kind of business website, and this is certainly something you need to think about. There are a lot of aspects of running a business that you need to get right, but creating the perfect website is one of the best ones. This is something you need to get right moving forward, as it can make a massive difference to the way the company comes across.

Conclusion

Make sure you do as much as you can to take your company further, and ensure that you are focused on improving the way the company comes across. If you can get these factors right you should find your business becoming more of a success moving forward. There are a lot of things to consider when you want to make your business better, and this is one of the key ones.

How to Design an Office Space on a Startup Budget

By Katya Puyraud

In the hustle and bustle of starting a business, the last thing you’re likely to think about is how your office will look. Yet this seemingly trivial detail can be key to all manner of things: your recruitment, the productivity of your workplace, and the image you project to visitors and the other businesses you work with. It’s not quite as crucial as turning a profit, but it will help you along the way.

Many entrepreneurs and startup owners don’t feel they have the time or the resources to make their office look nice, and neglect it until further down the line. By doing so, they are unnecessarily shackling themselves to an uninspired space, and potentially making their lives that bit harder. Designing an office space on a startup budget isn’t just possible – it can be an enriching and enjoyable experience to boot.

Bring Your Own Entertainment

Ideas about startup offices fall into two camps: either your space is ultra-modern and minimalist, or it’s stuffed with beanbags, ball pits and pool tables aplenty. There’s nothing wrong with either of these models, but they reflect paradigms that most startups probably shouldn’t be aiming for. Google can afford to turn their HQs into play parks because of where they are as a business, and the quality of talent they can attract. The same probably can’t be said of your first office.

This doesn’t mean that entertainment has no place in the workplace, however; it’s always good for people to have a space where they can genuinely unwind, and forget about their looming deadlines. But it’s likely that your employees are enthused enough about this idea to be willing to chip in towards it. They may not have a TV to spare (although it doesn’t hurt to ask!), but they might have a spare games console, some magazines and books, or just a Netflix account.

By designating a space to use as a rec room, you’re already sanctioning an area for people to unwind, and sending a signal about your company culture. Tastes differ enough between age groups that investing in a pool table or dartboard may go to waste. Let people bring in their own entertainment, however, and your employees can tailor the space to suit them. This gives them agency, makes them feel valued and saves you money, making it a winner all around.

Embrace Nature

Startups tend to value things like transport links and an economical space, which can often mean setting up in a gray, urban environment. Unfortunately, this can have a knock-on effect on your employees, as access to green spaces and pleasant views has been directly attributed to better mental and physical wellbeing. Thankfully, indoor plants can also make a great design element for your office, creating a little oasis from the outside world.

Indoor plants add a splash of color to any space, with color psychology suggesting that green decor makes us calmer and improves reading comprehension. There are more tangible benefits, however. Plants have also been shown to improve air quality, ‘scrubbing’ the air of volatile chemicals and contaminants. Just one or two plants in a large office can solve the issue of ‘sick building syndrome’, relieving headaches and boosting energy levels.

A NASA study into indoor air ranked the best plants for improving air quality, and found that ferns were the most efficient at removing pollutants. If you want to go even further, you might consider cultivating a small indoor or outdoor garden, and delegating watering responsibilities to different employees each week. This will serve as a sort of team building exercise and provide you with a short break from your work, helping to refresh the mind.

Use Personal Effects

In a sleek, modern office space, the temptation is often to make desks look as regimented as possible – and this can mean fewer personal effects. The popularity of the ‘KonMari’ method (removing things that don’t ‘spark joy’) has led people to intensively declutter, and this trend is extending itself to the workplace, with any extraneous items being binned or sent home with their employees.

It’s a popular opinion, but this is entirely the wrong thing to do – and the wrong message to take away from your Marie Kondo binge-watch. ‘Sparking joy’ may seem like an excuse to throw away magazines and decade-old socks, but it’s also a demonstration of the importance of the items around you. Joy is at least as important in the workplace as it is at home, and neat binders of documents aren’t likely to spark it either.

By inviting employees to bring in effects that genuinely mean something to them – be they photographs, artwork, toys or a potted plant – you can inject a little bit of home comfort and fun into the workplace without being too distracting. With a bit of luck, this familiar environment will make employees happier and more comfortable, and give them more impetus to put in a hard day’s work.

Get Creative with DIY

One of the most interesting generational shifts between young and old is the increased acceptance of used goods. Younger people are increasingly phasing out the purchase of new clothes entirely, instead relying on Goodwill and eBay bargains. Finding, making or repairing old items is seen both as fashionable and economical – and fits the ethos of a startup perfectly.

While you may not want to recycle work uniforms, you can look for some bargain office decor. Knickknacks and trinkets can make interesting pieces for desks and shelves, or be framing and mounted. Antique desks, tables and shelving can give your startup a unique, rustic aesthetic that sets you apart from the usual sterile office environment, while also being competitively priced.

If you’re feeling creative, this theming can go a long way. Depending on what your business does, you might find opportunities to ‘upcycle’ discarded items into industry-appropriate decor. From stacks of old CD cases or records for a music business to a table full of toy cars at a dealership, there are all sorts of unique ways to turn trash into conversation starters.

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Katya Puyraud on Twitter
Katya Puyraud
Former journalist Katya Puyraud is the co-owner of Euro Start Entreprises, specialising in company formation in France and the rest of the EU. Since 2007 Euro Start Entreprises has helped budding digital nomads, entrepreneurs and expanding SMEs to open their companies in over 30 countries worldwide

Guide to Startup Strategy

startup

Step-by-Step Checklist to Start Smart

By Michael Zernov

Launching your own startup can go in two ways. One, you begin unprepared, not having time or motivation to do due research on how to start; you stumble upon numerous unexpected problems on the way, and either try to catch up and adapt, panic-mode, or your enterprise falls flat and dies trying. The second way is you start your business slow, soaking up all the knowledge you can… and feeling overwhelmed with the amount of useless information and pointless “tips” out there.

What, you don’t feel like you’d preferred either of the perspective? Well, if succeeding with a startup was easy, we’d have had a dime a dozen Steves Jobses and Bills Gateses running around! But still, the latter of the options – learning as much as possible – is immensely more preferable.

Startup strategy – the first and the foremost

Every entrepreneur knows that planning stage is among the most important phases of starting a business. In it, you define the company’s line of activity and set long term goals that your organization would pursue. Basically, planning is sowing what you’ll reap.

To make the task a bit less menacing, we’ve prepared this thorough guide on startup strategy. We intended to transform the complex process of initial planning into a comprehensible, executable checklist. Take a look, and good luck with your endeavors!

Michael Zernov is a Writer for Roadmap Planner. He has a passion for learning and sharing experience with others. Michael has a vast knowledge of strategy, planning, internet privacy and security, and is keen on writing about these topics.

Startup stock photo by LDWYTN/Shutterstock

7 Reasons Why SEO Matters for Every Startup

No matter how lean your startup, you can at least afford do-it-yourself SEO.

6 min read

Opinions expressed by Entrepreneur contributors are their own.

For entrepreneurs, SEO is an integral part of building a successful startup from the ground up. Despite this, many founders neglect this low cost, high reward business strategy, according to digital growth expert Scott McGovern.

A Search Engine Optimization (SEO) strategy is a powerful tool for any startup — and doesn’t have to kill the budget. There are six reasons why optimization needs to be a priority for every business owner, according to McGovern.

1. SEO delivers customer behavior data to startups.

SEO uncovers significant data. The more search engine optimization research a startup does, the more data they have about what potential customers are searching for.

“When a founder is just beginning their business, they don’t have much data about their audience,” says Scott McGovern. “SEO helps accumulate that data over time. They can continue to benefit from it long after they’ve launched their business.”  

Some of the best SEO tools to help you rank higher in Google have free trial versions. Startups can see which words their target customer audience is using to conduct searches. A founder can also conduct their own Google search and input words that pertain to their business.

From there, Google will auto-fill those terms based on how often people search those words.

Related: 7 Best SEO Tools to Help You Rank Higher in Google

2. SEO results in higher traffic and conversions.

SEO helps startups get traffic that can yield conversions and revenue.

Instead of spending money on social media advertising and other marketing tactics, McGovern recommends building out SEO and staying current with Google’s best practices.

“Maybe you’re installing a product or you’re a publisher and you’re trying to get impressions,” explains Scott McGovern. “If you can rank particular keywords that don’t have high searches and aren’t very competitive like some long-tail keywords, then you can start driving organic traffic.”

“It’s been proven that organic traffic — traffic that comes from a search like on Google — converts 400 percent better than any other type of traffic besides email marketing,” he added.

3. It’s free.

SEO can be free — along with many of the tools necessary to use it, like Google Analytics and Google Search Console.

With Google Analytics, it’s possible to see what users are doing on a website or platform. Google Search Console shows a founder exactly what was searched and how visitors landed there. Broken links or 404s, which are bad for SEO health, can also be identified.

“All it takes is time versus money,” says Scott McGovern. “As a startup, all you have is time. You can go through Google’s platform and learn how to set up the entire process whether you use Shopify, WordPress, Magento, or whatever you are using.”

For businesses looking for professional help, there are also ways to keep costs low when choosing your next SEO firm.

Related: 5 Tips for Choosing Your Next SEO Firm

4. SEO helps startups make informed business decisions.

The same data that helps a founder understand customer behavior can be used for other critical startup actions. The information can be applied to an overall business strategy to shape the decisions a founder makes, leading to successful launch and growth stages.

“Once you figure out the consumer, you can decide how to convert them. Then you can vertically integrate that by creating specific clickfunnels geared toward those specific users,” says McGovern.

“For example, you can say, ‘my user is a 24-year-old male who typically lives in this part of the country.’ Then you can create content specifically geared toward that particular user.”

SEO data can also inform other business decisions.

“If one keyword is doing really well, then you can create other keywords off of that which aren’t searched as much,” McGovern explains. “Or, there might be other long-tail keywords which you can also drive other traffic for greater conversions.”

5. Optimizing for Google strengthens consumer trust and value.

SEO helps startups build relationships with potential customers with minimal effort. When a business shows up fairly high on the search results, it builds customer trust. From there, the company can work toward building respect and credibility, which are necessary for a new brand relying on digital channels for conversions.

“The last company I did it for, we collected 180 thousand emails from organic traffic,” McGovern explains. “Whether people sign up for a newsletter or they want alerts about discounts, when they see your search results in Google, it automatically builds intrinsic value for the consumer that they can trust your business.”

6. SEOptimization builds a long term audience.

Paying for advertisements delivers short term results for a high price.

SEO helps businesses provide their visitors with the content they want. Instead, of having traffic tank the moment an advertisement runs out, SEO will build an audience over time.

“The better and more popular your content is, the stronger its SEO will become over time as other sources link to you and Google rewards you for providing quality information, not spam,” Mcgovern explains.

Of course, SEO requires constant upkeep.

“Google is constantly updating its algorithms, which may or may not affect your business,” he adds. “Search isn’t a one-time solution but a constant process of staying up to date.”

That’s why it’s important to stay up to date on SEO marketing trends in 2019.

Related: 6 SEO Marketing Trends in 2019 That Entrepreneurs Should Know About

7. SEO delivers results for startups.

Building a digital presence is crucial for any startup, no matter the industry. The best way to gain awareness, brand equity and traction is through SEO. Optimization tools give businesses easy access to data about their audience. Beyond that, search engine optimization is the cheapest way to build a customer base and inspire consumer trust.

For startups and established companies that don’t want to spend on large scale advertising campaigns, search engine optimization is the best way to build a brand.

How to Build the Network Required for Startup Success

startup

By Simon Davies

Your startup relies on a lot more than a good idea to be successful—it takes years of graft, commitment, and perseverance to stand out from the crowd and thrive. One hugely important factor in a startup’s fortunes is the ability to build up a network. Making connections can help a business gain investors, raise its profile, and meet potential clients, all of which are vital in helping your company hit the ground running. In fact, a study by the Economist Intelligence Unit found that 78% of startups surveyed felt networking is crucial to entrepreneurial success.

But if you’re just starting out in the business world, you might not know how to form lasting relationships with fellow entrepreneurs. Luckily, with these easy tricks to ensure you connect with the right people, we’ve got you covered.

Move your business to a shared work space

Rather than a traditional office space, co-working spaces and serviced offices are rising in popularity, with global take-up of shared work spaces increasing by 200% between 2013 and 2018. These offices come with various benefits, such as amenities like stocked kitchens, receptionist services, and state of the art tech equipment, meaning you don’t need to worry about overhead costs. However, since co-working spaces allow any individual or business to rent a space, now taking up approximately 27 million square feet of office space across the US—they offer countless opportunities for networking.

The main difference between co-working spaces and conventional leased offices is that businesses in co-working spaces share the building with other companies or individual freelancers, and work on a hot desking set up. Their communal nature makes them a breeding ground for exchanging information and services with other professionals.

If you like the idea of working from a shared office but want to avoid having to look for a desk every day, then a serviced office may be an ideal compromise. Here you pay for your designated, fully furnished office space, including additional services like a professional reception team. This is a vastly different setup to both co-working spaces and a conventional office, as businesses based in serviced offices share the building, but have both their own designated space and shared communal areas with the other companies.

This provides the best of both worlds—the networking benefits of co-working spaces with the privacy of a conventional office. Serviced office space providers Landmark note that, if you own a small company and aren’t sure about how much space you need, the flexible leases used in serviced offices make it easier for businesses to scale up or down as they see fit. These contracts are not long-term, so you only have to commit for as long you as like, unlike a traditional office lease. This allows you to put your capital to another area of your business, giving you both networking and financial benefits.

Harness social media to your advantage

Utilizing online platforms for networking purposes can boost the success of your business. Online networking allows you to find individuals or companies to connect with, who you may want to collaborate with later down the line. Social media can also help you develop and maintain professional relationships with people you’ve previously met in person.

The most obvious place to start is LinkedIn, which was specifically designed for professional networking. Create a company profile if you don’t already have one, and search for your industry’s keywords to find and connect with people and businesses within your niche. Make sure to send them a personalized message, discussing what you have in common and why you want to connect with them. Doing this regularly should help expand your network.

However, you don’t have to be limited to just LinkedIn—Twitter’s advanced search feature will help you follow and interact with like-minded professionals, whilst Facebook Insights is an excellent way of finding potential customers.

Go to specialized networking events

Although online networking is important, meeting people face-to-face gives you a much greater chance of making a lasting impression. Industry networking events represent the easiest and most effective method of doing so, and are an essential way of being exposed to like-minded professionals. Meeting others in person enables you to showcase your personality and strengths, helping to build human relationships and encourage others to work with you. Face-to-face meetings also allow you to go into longer and more detailed discussions than online interactions, letting you share much more information. They also make it much easier to avoid any misunderstandings, which can be cleared up instantly.

Attending events that have real potential to benefit your startup, and that are relevant to your market, can have a huge impact on your success. HubSpot has a useful guide to finding network events and suggests taking factors like the agenda, organizer, and number of attendees into consideration when picking an event. Once in attendance, it is important that you avoid monopolizing the conversation, and are open to listening to others as well as getting your own message across—you may learn something from another entrepreneur which you can apply to your own business.

With networking constituting such an important part of your startup’s fortunes, following the above tips stands you in the best possible stead for success.

Simon Davies is a freelance journalist interested in marketing, tech and small business. Follow him at @SimonTheoDavies.

Shared work space stock photo by fizkes/Shutterstock

STARTUP STATISTICS – The Numbers You Need to Know

Each year, thousands of ambitious entrepreneurs start new businesses. These entrepreneurs feel bright and full of hope. And plenty of small business statistics show that by the end of four years more than half of them will be gone.

Small business failure rate aside, many small businesses make it past that critical period and thrive. How many make it and what industries fare best? We’ve collected these startup statistics for small businesses from a variety of sources to answer those questions.

GENERAL STARTUP STATISTICS

  • 69 percent of U.S. entrepreneurs start their businesses at home.
  • According to the National Association of Small Business’s 2017 Economic Report, the majority of small businesses surveyed are LLCs (35 percent) followed by S-corporations (33 percent), corporations (19 percent), sole proprietorships (12 percent), and partnerships (2 percent).
  • 51 percent of people asked, “What’s the best way to learn more about entrepreneurship?” responded with “Start a company”.

SMALL BUSINESS OWNER STATISTICS

Who’s starting small businesses today? Here’s a look at small business owners:

  • Gender:
    • 73 percent identify as male; and
    • 25 percent identify as female.
  • Age Range:
    • 50-59 years old: 35 percent;
    • 40-49 years old: 25 percent;
    • 60-69 years old: 18 percent;
    • 30-39 years old: 14 percent;
    • 18-29 years old: 4 percent; and
    • 70+ years old: 4 percent.
  • Education:
    • High School / GED: 33 percent;
    • Associates Degree: 18 percent;
    • Bachelor’s Degree: 29 percent;
    • Master’s Degree: 16 percent; and
    • Doctorate: 4 percent.
  • Reason for starting business:
    • Ready to be his/her own boss: 26 percent;
    • Wanted to pursue his/her passion: 23 percent;
    • The opportunity presented itself: 19 percent;
    • Dissatisfied with corporate America: 12 percent;
    • Laid off or outsourced: 6 percent;
    • Not ready to retire: 6 percent;
    • Other: 5 percent;
    • Life event such as divorce, death, etc.: 3 percent.
  • Ethnicity:
    • White/Caucasian – 71 percent;
    • Hispanic/Latino – 6 percent;
    • Black/African American – 7 percent;
    • Asian/Pacific Islander – 11 percent;
    • Other – 5 percent.
  • 82 percent of successful business owners did not doubt they had the right qualifications and proper experience to run a company.

STARTUP FAILURE RATE STATISTICS

  • Of all small businesses started in 2014:
    • 80 percent made it to the second year (2015);
    • 70 percent made it to the third year (2016);
    • 62 percent made it to the fourth year (2017);
    • 56 percent made it to the fifth year (2018).

  • Given those numbers, a bit more than half of all startups actually survive to their fourth year, while the startup failure rate at four years is about 44 percent.
  • Top 10 causes of small business failure:
    • No market need: 42 percent;
    • Ran out of cash: 29 percent;
    • Not the right team: 23 percent;
    • Got outcompeted: 19 percent;
    • Pricing / Cost issues: 18 percent;
    • User un-friendly product: 17 percent;
    • Product without a business model: 17 percent;
    • Poor marketing: 14 percent;
    • Ignore customers: 14 percent; and
    • Product mistimed: 13 percent.

STARTUP FINANCE STATISTICS

Money is a key ingredient to the small business success rate. Here’s a financial snapshot of small business startups:

  • A third of small businesses get started with less than $5,000 and 58 percent got started with less than $25,000.
    • In addition, 65 percent admitted to not being fully confident they had enough money to start their business and;
    • An overwhelming 93 percent said they calculated a potential run rate of shorter than 18 months.
  • The most popular small business financing methods in 2018 were:
    • Personal funds 77 percent;
    • Bank loan 34 percent;
    • Borrowing from family/friends 16 percent;
    • Other funding 11 percent;
    • Donations from family/friends 9 percent;
    • Online lender 4 percent;
    • Angel investor 3 percent;
    • Venture capital 3 percent;
    • Crowdfunding 2 percent.
  • 40 percent of small businesses are profitable, 30 percent break even and 30 percent are continually losing money.
  • Having two founders, rather than one, significantly increases your odds of success as you’ll:
    • Raise 30 percent more money,
    • Have almost 3X the user growth, and
    • Are 19 percent less likely to scale prematurely.
  • 82 percent of businesses that fail do so because of cash flow problems
  • 27 percent of businesses surveyed by the NSBA claimed that they weren’t able to receive the funding they needed.

FASTEST GROWING SMALL BUSINESS INDUSTRIES

The industries with the top number of small business startups in 2018 were:

  • Business services: 11 percent;
  • Food/Restaurant: 11 percent;
  • Health/Beauty/Fitness: 10 percent;
  • General retail: 7 percent;
  • Home services: 6 percent.

INDUSTRIES WITH THE BEST STARTUP STATISTICS

The 10 most profitable small business industries by net profit margin (NPM) are:

  • Accounting, Tax preparation, Bookkeeping, and Payroll Services: 18.4 percent NPM
  • Lessors of Real Estate: 17.9 percent NPM
  • Legal Services: 17.4 percent NPM
  • Management of Companies and Enterprises: 16 percent NPM
  • Activities Related to Real Estate: 14.9 percent NPM
  • Offices of Dentists: 14.8 percent NPM
  • Offices of Real Estate Agents and Brokers: 14.3 percent NPM
  • Nonmetallic Mineral Mining and Quarrying: 13.2% NPM
  • Offices of Other Health Practitioners: 13 percent NPM
  • Medical and Diagnostic Laboratories: 12.1 percent NPM

INDUSTRIES WITH THE WORST STARTUP STATISTICS

The 10 least profitable industries in the US by net profit margin (NPM) are:

  • Oil and Gas Extraction: -6.9 percent NPM
  • Software Publishers: -5.1 percent NPM
  • Beverage Manufacturing: -3.7 percent NPM
  • Semiconductor and Other Electronic Component Manufacturing: -0.3 percent NPM
  • Forging and Stamping: 0.4 percent NPM
  • Farm Product Raw Material Merchant Wholesalers: 0.9 percent NPM
  • Beer, Wine, and Distilled Alcoholic Beverage Merchant Wholesalers: 2.1 percent NPM
  • Petroleum and Petroleum Products Merchant Wholesalers: 2.8 percent NPM
  • Grocery Stores: 2.2 percent NPM
  • Bakeries and Tortilla Manufacturing: 2.3 percent NPM

Bottom Line

So, if you want to start your own business, don’t let the startup statistics above put you off. After all, you’re more likely to succeed if you’ve failed than if you’ve never tried:

  • Consider, founders of a previously successful business have a 30 percent chance of success with their next venture, founders who have failed at a prior business have a 20 percent chance of succeeding versus an 18 percent chance of success for first time entrepreneurs.

Startup Photo via Shutterstock

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7 strategies to stay sane through startup stress

Bypass burnout

Starting a business — and growing it — can present stressful challenges. With your ever-growing to-do list, clients to call, people to hire and manage and everything in between, it’s no wonder that entrepreneurs experience inordinately high burnout rates. Entrepreneur stress is real — but there are ways to manage startup stress to avoid burnout.

Related: Quiz — Do you have what it takes to be your own boss?

7 strategies to slay entrepreneur stress

Burnout is the dark side of the passion that motivates many entrepreneurs to push themselves to their limits. It doesn’t have to be that way.

  1. Take a breather.
  2. Identify the underlying issue.
  3. Figure out the whole story.
  4. Restructure your thoughts.
  5. Find a supportive community.
  6. Let tech give you timeouts.
  7. Write down your experiences.

Try one or more of these strategies to manage the stress that often accompanies starting a new venture.

Related: 3 tips for solopreneurs to avoid burnout

1. Take a breather

One of the most helpful things you can do to combat entrepreneur stress is to step away. Leave your phone on your desk, find a quiet spot, and take a deep breath. It may sound simple, but it can help you calm down as well as think clearer.

It makes you believe a situation is worse than it really is, and calming your mind even a little can help you find solutions you wouldn’t otherwise see.

Here’s one method of breathing deeply that really works:

  • Breathe out to empty your lungs completely.
  • Breathe in slowly, taking three seconds to do it.
  • Breathe out again over three seconds.
  • When your lungs are almost empty again, say “relax” out loud.
  • Repeat as many times as needed.

Related: 5 essential steps to make space in your life for a digital detox

2. Identify the underlying issue

Once you feel calmer, you can start working on the root cause of your stress, which may not be related to starting your business. Often, it’s not the immediate situation that’s actually causing anxiety.

Our current situation reinforces negative thoughts we already believe about ourselves, others or the world. These negative thoughts and beliefs are called stuck points.

If you don’t resolve your stuck points, your stress will keep coming back.

For example, you might get stressed planning a marketing campaign. You may think the solution is extending your deadline, but it doesn’t help. You may actually be stressed because you think you’re not capable or good enough.

Unless you resolve that underlying thought, marketing will continue to stress you out.

Once you identify the root cause of your stress, you can kick it to the curb.Once you identify the root cause of your stress, you can kick it to the curb.
Photo: Thought Catalog on Unsplash

3. Figure out the whole story

Fortunately, you can use some of the methods from Cognitive Behavioral Therapy (CBT) to retrain your brain to think more positively and reduce your overall stress.

As previously mentioned, the more you do this work, the greater the stress relief you’ll notice over time.

First, you need to identify your stuck points: “concise statements that reflect a thought — not a feeling, behavior or event,” according to the Center for Deployment Psychology.

To do this, remember the moment when you started feeling stressed. Then, remember the negative thought that was going through your head when it happened.

This is often your stuck point. Write it down along with any more of these negative thoughts that came up.

4. Restructure your thoughts

Once you have identified your stuck points, you can reframe your thoughts to reduce their severity.

Pick a stuck point and decide whether this thought is a habit of yours or based in fact.

Look for evidence that your thought is true. Chances are, you won’t find any evidence that is based in fact. Once you realize this, you can retrain your brain.

To help you come to this conclusion, ask yourself if you’re distorting the truth by:

  • Exaggerating
  • Overgeneralizing
  • Jumping to conclusions
  • Filtering out positive events
  • Thinking in terms of “all or nothing”
  • Minimizing your situation
  • Not interpreting the situation accurately
  • Taking things out of context
  • Basing your thoughts on feelings, not fact
  • Focusing on irrelevant factors
  • Ignoring important aspects of your situation
  • Oversimplifying
  • Assuming you know what others are thinking
  • Feeling something and assuming it’s for a negative reason

It can also be helpful to ask yourself whether the thought comes from a cultural or societal bias. Maybe someone said something that sprouted this negative thought long ago. In these cases, ask whether the source for this information is reliable.

Once you have come to the conclusion that your stuck point isn’t based in fact, come up with a statement that’s related and states the opposite. It should also be balanced, meaning the statement isn’t too negative or too positive.

For example, “I’m not good enough” would become “I am good enough.”

See how that statement feels. If you don’t believe it to be 100 percent true, try a different statement that’s closer to your original.

For example, “I’m good enough sometimes.”

Over time, as you continue this work, you can adjust the statement to reflect the balanced thought you want to believe.

Whenever entrepreneur stress strikes again, repeat your balanced statement to remind yourself of the work you did, unraveling your stuck points. You should notice a reduction in your overall stress level.

For details, check out 25 CBT Techniques and Worksheets for Cognitive Behavioral Therapy.

Entrepreneur Stress Person on Top of MountainStress can feel like an unclimbable mountain. Keep going and you can reach the top.
Photo: Tory Morrison on Unsplash

5. Find a supportive community

Finding others in the same boat can help you find strength when you need it. Knowing you’re not alone can provide you with some much-needed relief.

There are many free Slack groups for people like you who are starting a business, including:

You can also look for local meetups and professional organizations, in addition to finding a mentor who can share their own experiences with overcoming startup stress.

Related: 14 startup resources for female founders, 6 top-ranked business networking groups on the web and Finding a mentor

6. Let tech give you timeouts

Godaddy Smartline Help With Entrepreneur Stress

Like the tech tools mentioned above for connecting with a community of like-minded individuals, there’s a wealth of technology available to shoulder some of the stress that comes with starting a business. Here are just a few favorite tools:

  • IFTTT. This web-based service easily enables you to automate projects ranging from automatically posting Instagram photos to your Facebook page to converting files and logging finished to-do list items on your calendar.
  • SmartLine. The line between business and personal gets blurry for many entrepreneurs — this second phone number app makes it easy to distinguish between business and personal calls on your smartphone.
  • Todoist. With this project management app you can manage tasks from mobile, tablet and computer. Todoist allows you to create recurring tasks and use project templates to save time and reduce entrepreneur stress.

Related: How to supercharge productivity using Microsoft Office 365 tools

7. Write down your experiences

Journaling can also be a helpful tool to manage your stress as your business grows.

You can keep track of your progress. Every once and a while, you can look back and see proof of how far you have come to give yourself a confidence boost.

Don’t let entrepreneur stress damper your dream

There’s no doubt that starting and running your own business can be stressful — but you CAN take steps to manage that stress and realize your full potential. To recap:

  • Take a step back to breath.
  • Identify the root cause of your stress.
  • Find your “stuck point” — the moment you began feeling the stress and the thought that accompanied it.
  • Reframe your thoughts to reduce the severity of the stress they cause.
  • Turn to online and offline communities for support.
  • Use technology to help ease the startup burden.
  • Keep a journal.

These tactics can help you focus on what matters most — staying strong and healthy so you can be the kind of entrepreneur you want to be.

Image by: Ali Yahya on Unsplash