Business Survival Rates in Canada

The way the mainstream media reports on SME business creation/survival is highly biased and skewed. The press likes to report on the wild success stories and ignores the all-to-real failures, which gives the general public and budding entrepreneurs a false sense of hope and security, ignoring the stark reality of small business life in the first 5 years of existance.

Here are the bare facts that you won't see in the media every day, as reported by Canadian designer, John Arnott at a recent Design Exchange annual conference:

• 140,000 new firms started in Canada (2004)
• 130,000 businesses closed
• Net 10,000 new firms, creating between 20,000-100,000 new jobs
• Only 10% of new companies survive
• 25% < 2 yrs,
• 36% > 5,
• 20% > 10
• If we could change that to 20% from 10%  it would add $6 billion to the economy

Blog reader Gray Hammond also reminds us of a Strategis web site with a title: How many businesses appear and disappear each year? at strategis.ic.gc.ca/epic/site/sbrp-rppe.nsf/vwapj/KSBS_July2006_Eng.pdf/ The above failure rate has a number of implications, least of which is a 90% loss of your customer base annually, if you play in the busines to business (B2B) space or if you are a bank, lending money to them. Want to improve you chances of SME success? ...keep reading this blog and enrole in the new University of Toronto Certificate program on Entrepreneurship and Innovation.

Source: Certificate program in Entrepreneurship & Innovation; University of Toronto, School of Continuing Studies, St George Campus.

© 2005-2007 

Walter Derzko -"Changing the world, one idea at a time"©

Walter Derzko teaches at the Certificate Program on Entrepreneurship and Innovation at the University of Toronto, School of Continuing Studies, which starts in the Fall of 2007

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