That’s The Good News, Now Do You Want To Hear The Bad News?

If you do a quick search on the internet, you will uncover hundreds of experts, coaches, accountants, journalists and government organizations that quote the statistic “8 out of 10 business fail in the first year”. However, the fact that the statistic is widely touted doesn’t necessarily mean that it’s true or backed up by empirical evidence.

So what is the truth? I searched the internet and couldn’t find confirmation of any study that was done to back-up this statistic (that 8 out of 10 businesses fail) by a reputable or well-known bureau. What I did in fact find was some evidence to the contrary. According to credit reference checking agency Veda Advantage, only a small percentage of new businesses close in their first 12-months of business.

What is the exact amount, you ask? Would you believe, less than two percent?

However, they assert another 32 percent close their doors between their second and fifth year of operations, while 21 percent wind up between the sixth and ninth.

So, that is the good news. However, as you can probably guess, it’s not ALL good news.
Just because a start-up doesn’t go under in the first 12 months, doesn’t mean that the owner is running a successful enterprise. I wonder if anyone has bothered to measure how many of the businesses who survived:

• Paid the owner a wage that was at least equivalent to what he/she could have earned elsewhere as an employee?
• Generated a profit and positive cash flow? and
• Had enough working capital to service their debt, pay taxes and suppliers etc. as they came due?

The first few years of business are incredibly risky. In working with hundreds of business owners, we have found that the large majority opt to forgo their salary or inject more equity to prevent them from going under prematurely. What this means is that, while they may not have “technically” gone under, these fledgling enterprises are far from commercially viable and successful.

Statistics can be both helpful and misleading at the same time. It is easy to assert figures but more difficult to substantiate their veracity or explain the implications thereof.

The author of an article or press release will often use statistics to capture your attention and motivate action. That’s why people use statistics – numbers are persuasive and have an aura of authority.  A statistic like – 8 out of 10 businesses fail – gets attention, doesn’t it?  Whether this data is accurate or not, is only half the story. As a business owner or manager, we must look deeper to find the insights that we can take away and use to improve our results.

Personally, I don’t care what percentage goes under. No matter how long you’ve been operating, if you’re not getting paid a salary, producing profit and generating positive cash flow, you’re not running a successful company. Closing your doors is only half the story. The doors may very well be wide open, but technically, no one is there.

Rhondalynn Korolak, Author of Financial Foreplay® and On The Shoulders of Giants

You may have just heard that Google is adding its take on the “like” button — which it is calling the “plus-one” . The plus-one is Google speak for making search more social and to combat that growing omnipotence of Facebook. This new feature will allow users to vote plus-one on search results they find useful, and to share that preference with their connections in Gchat, Gmail, Google Reader, Buzz and Twitter. Users will be able to view the total number of plus-one votes and the names of their contacts who have posted their preference.

Rhondalynn Korolak, Author of Financial Foreplay® and On The Shoulders of Giants

Discipline and attention to details is more important than ever if you want to succeed in challenging economic times. Take a look around… competitors are closing their doors – which means more potential customers for the businesses that DO survive. And in times like these, it’s going to take more than “thinking outside the box” and goodwill with existing customers to secure the survival of your business.

You may have been lucky over the past few years – you may have found it possible to operate without a detailed, written plan and systems/processes. But the global economic crisis has changed all of that. If you want to thrive, there is only one thing that is for sure – uncertain times call for deliberate decisions and proven practices.

So here are & top tactics to recession-proof your business.

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Rhondalynn Korolak, Author of Financial Foreplay® and On The Shoulders of Giants

The restaurants and promenades in the Docklands (Melbourne) were packed on Monday, night with couples. It was after all Valentine’s Day – the day when everyone declares their undying love for each other… well, at least their “commercial love”.

Apparently, if NAB has anything to do with it, February 15^th is now the official day of the year to break off a bad relationship – the “unValentines Day”. I wonder how long it will take for chocolatiers, greeting card companies and florists to create some products to commemorate this special occasion?

The obvious question that no one seems to be asking is “why was the NAB dating both the ANZ and CBA in the first place?”

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Rhondalynn Korolak, Author of Financial Foreplay® and On The Shoulders of Giants

Life isn’t always easy – there can be no question about that. It’s unpredictable and it’s often hard to make sense of what happens. Some of the events in our journey end up being nothing more than minor irritants, while others are more like being hit by a Mack truck at 200 kph.

Regardless – we have to play the hand we are dealt.

Part of the process of coming to terms with whatever occurs in your life is to find a way to make sense of it. If science indicates that objective reality doesn’t actually exist, it is very much up to us to create a reality that helps us move on and find some meaning. As W Mitchell so accurately points out, ‘It’s not what happens to you, it’s what you do about it that matters’.

I like to think of it as choosing to ‘make chicken soup out of chicken shit’. And it is often in these times of desperation or perspiration that we accomplish our greatest achievements. We play the hand that we have been dealt and in so doing we stretch beyond the finite boundaries of probability and skill into the realm of possibility and inspiration.

For Christopher Reeve a random riding accident changed his life. Everything he was in terms of his career and how people perceived him vanished the instant he hit the ground. And yet he was able to muster his resources and master his own mind so as to find a reason to carry on. I’m sure becoming paralysed was not part of his life plan. I’m sure there must have been times that he was angry and bitter, but these feelings obviously didn’t consume him.

The simple truth is that Christopher Reeves found himself in a wheelchair at just 43 years old. Nothing could be done to change that. There was no way to wind back the clock and no way to repair the damage. His condition was permanent. But his state of mind and any negative emotions he felt were temporary and 100% within his control. He had two options: (1) let the event consume his life and extinguish his spirit or (2) accept his condition and make the best use of his time and influence to advance science in the hope that someday others with spinal cord injuries might walk again. In many ways, he became more of a superhero after his accident than he had previously been in his film roles because he created a vision and a purpose that was bigger than the event that changed his life.

He accepted the cards he was dealt in the game of life and he played with the courage, determination and strength of character of a superhero. Perhaps Christopher himself said it best, ‘I think a hero is an ordinary individual who finds the strength to persevere and endure in spite of overwhelming obstacles. They are the real heroes, and so are the families and friends who have stood by them.’

Perhaps today, January 5th, 2011…….yes TODAY – is the perfect time for us to all stand back and celebrate the superhero within ourselves and others. If we choose to play the hand we have been dealt to the best of our ability…I think we will all look back [someday] and agree that the “game” was worthwhile.