Failure Rate Among New Businesses Is High So Should Entrepreneurs Take A Test Be Able To Run A Business?
By admin on Feb 06, 2010 with Comments 7
That sounds socialist to me.
I say let the free market decide which business survive and which ones fail. Sometimes an enterpreneur may have several fails before they hit a success. Why interfere?
Filed Under: Featured
Founding a business and running a business are two very different jobs — requiring two very different skill sets. While a test might allow you to assess a person’s abilities to remember the academic “rules” of business, it won’t measure that skill in action. Plus, there’s an element of luck that can’t be captured via testing.
There is a high failure rate among new businesses, but keep in mind that there are a lot of successes as well. Though a variety of statistics have been reported as regards this high failure rate (e.g., some say that 90% of all new businesses fail), there is in fact NO credible measure of failure. Why not? Because it’s hard to find the failures! Recent academic estimates place the failure rate at much lower than many say. A host of sole proprietorships and franchises are successful, for example.
One more thing … Entrepreneurship researchers have spent the better part of 2-3 decades trying to identify the personality characteristics that make up the ideal entrepreneur. At the end of all that research, the results were completely inconclusive. Entrepreneurs truly come in all shapes and sizes, with a multitude of different personalities. Too, there are many non-entrepreneurs who exhibit entrepreneurial characteristics at one time or another.
[...] Failure Rate Among New Businesses Is High So Should Entrepreneurs … [...]
every time they pay a bill on time, and every time they make payroll, and every time they pay fair taxes, they are passing a test.
Who defines what failure is anyway?
Is running a successful business for 5 years then terminating it after a sale to a larger corporation a failure?
Is retirement a failure?
Is being profitable for 3 years as a consultant then deciding to take a job with someone, terminating your business, a failure?
If the business was started as a hobby, is abandoning it really a failure?
Not measurable!
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