New research commissioned by Michigan CFO Associates shows many small-business owners are “driving without a map,” plagued by uncertainty, and risking their companies in the process.
"Owners need information and specific skills on business planning and analysis if they are to beat the odds of a 98% failure rate." - Todd Rammler
Detroit, MI (1888PressRelease) August 11, 2009 - How much do small-business owners really know about growing a healthy company? According to Michigan CFO Associates, not enough. That’s the conclusion suggested by a compelling new study released this week that shows owners aren’t getting enough information and guidance when it comes to avoiding the warning signs in their path.
Commissioned by Todd Rammler, president of Michigan CFO Associates, the study compiled a wide range of small-business statistics revealing the most common reasons small businesses fail — and what owners can do about it.
“What’s most surprising are the results we didn’t expect,” Rammler says. For example, in a survey of 500 firms nationwide, a shocking 99% had no written plan for growth.
More surprising revelations of the research (see contact link to receive a copy) include:
•98% of businesses fail by the 10th year
•80% of new businesses fail due to undercapitalization
•Only 23% of businesses price their products or services properly
What does this mean? Far more businesses owners than previously thought are running their companies without critical information needed for sound decision-making. What’s more, these ventures are often the largest single piece of the owner’s net worth, which makes for a risky combination.
“This really shows that owners need information and specific skills on business planning and analysis — particularly as it relates to financial decisions — if they are to beat the odds of a 98% failure rate,” Rammler says. “An uninformed decision can easily lead to losing a company, as well as wiping out the owner personally. Sound decision-making is crucial.”
About Michigan CFO Associates:
Michigan CFO Associates is a leading provider of outsourced CFO services to privately held businesses. The firm emphasizes “future focus” and specializes in improving profitability and cash flow through better data and decision-making.