Optimism can help you through the tough early stages of starting a business. Yet blind optimism is something you could come to regret.
A healthy dose of realism will go a long way to protect your interests.
Many businesses do not make it past the first few years
What is the oldest business you know? What happened to all the companies that started up say 100 years ago? Most are now closed for some reason or the other, so it’s common sense that your business will probably also close at some point.
According to the Bureau of Labor Statistics (BLS), many fail in the first few years:
- 20% fail within two years of opening
- 45% within five years
- 65% within 10 years
- 75% within 15 years
How can you make the end of your business, should it happen, less problematic?
When you create your business think about how you will settle things with any investors or business partners if things come to an end. Consider different reasons for its ending, both good and bad. What if you want to finish up but others don’t or vice versa? What personal risk do you and others take in the event of a failure where your company still owes people money?
Getting help to consider all these things before you create your business can ensure you make decisions that will stand you in good stead in the future. Choosing the right company structure and inserting appropriate contract clauses can all help protect you when the day comes to shut up shop.
Many people whose businesses have failed have gone on to find success. Yet, learning from your failures will be much easier if you are not financially or legally burdened by your past attempts that did not work out as you had hoped. Getting legal help to start your business reduces the chance of litigation when things end.