Around 800 businesses (enterprises) employing 1 or more people started per month during the period Feb 2017 to Feb 2018. The number is probably greater than that if you count businesses that are invisible to Statistics NZ (SNZ) because they didn’t pay tax and or didn’t register a formal entity such as a company.
Staying with what can be measured by SNZ, that is 800 businesses per month or 9,600 per year, and going by the rates of business failures also reported by SNZ of around 20% in their first year of operation, then 1,920 of those businesses will fail, or 5 per day.
What a miserable statistics! Especially when you think about the waste of real wealth, time, and effort those failures represent.
Can anything be done about this sorry state? Of course, there can – read my eBook Starting a Business – With Facts, Not Faith! Seriously for a moment, yes I believe that those failure rates are reducible, though not necessarily by reading the gospel according to Glyn, though I’d like to believe my little eBook might have value and play a part.
If you want to read about some of the statistics, then read this paper. The paper has some sobering data in tables. Fun for the ghoulish.
I’ll leave you with this thought – 85% of people believe that they are above average in any particular skillset (driving a car say). Confession – I just made those numbers up, because I can’t find the original source, but they’re about right. Here’s a Wikipedia Reference explaining the effect. It’s not a trick statement I made, but it does require one to pay attention and know a little about statistics – it is not possible for more than half (85%) of the population to be better than the average (50%), the other half. This, I think I am better than I really measurably am effect (superiority bias), may be why the failure rate of enterprises is so high. After all, how hard could it be right?! If he or she can do it, then so can I!
Exercising due diligence is called calculated risk-taking, diving right in because of superiority bias is called GAMBLING!!!