The Bureau of Labor Statistics reports that a minimum of 20% of small businesses fail in their first year, while 45% are unable to survive beyond their fifth year. Moreover, the rate of collapse rises to 65% within the first decade of operation, leaving only a mere 25% to remain operational for over 15 years. Hence, the overall rate of business failure stands at an alarming 70%.
The primary reasons for the majority of business failures include the absence of a practical business plan, insufficient funding, and insufficient market research resulting in oversaturation. To increase the chances of business survival in the early years of operation, entrepreneurs can benefit significantly from partnering with a startup studio. By doing so, they can significantly mitigate the risks of failure and improve their prospects of creating and maintaining a successful business. Here’s why.
What are Startup Studios?
Startup studios consist of a group of experts dedicated to helping new businesses get off the ground. The goal of a startup studio is to help entrepreneurs avoid failure and risk by providing invaluable resources to launch sustainable businesses.
Such studios are especially popular with budding entrepreneurs because they give access to mentors and resources like funding, tech support, and marketing experts. They provide a space for new startups to work on their ideas and build their businesses without taking on all the risks themselves. This makes it easier for startups to get off the ground, which reduces failure rates synonymous with new companies.
3 Ways Partnering With Startup Studios Can Help Mitigate Business Failure and Risk
The cost of starting a new business is often high. Even if you manage to get through those early days without failing, there’s still a chance that whatever you’ve built won’t fly with investors or customers. If this happens, your startup may fail and leave you with debt and regret.
Due to their hands-on involvement in the early stages of a business, startup studios can ensure the stability and sustainability of a new venture. Working with a startup studio can minimize the risk of failure and increase the chances of launching and running a thriving business, in the following ways.
1. They Provide Pooled Resources
Startup Studios aims to help entrepreneurs build a successful company that scales. As such, they offer pooled resources like professional teams, legal experts, mentorship, and coaching advice from professionals in your niche. They also enable founders to build relationships with potential investors, which can be crucial in securing funding.
2. They Plan for Potential Threats
Startup studios keep an eye on the state of relevant commerce industries and markets in order to be prepared for a sudden market downturn. A startup studio can leverage its diverse portfolio of companies and investors to help new founders navigate the often risky startup marketplaces.
3. They Help Build Scalable Business Models
New startups are always looking for ways to grow their business and expand beyond their current location, office space, or employees. If this describes your current situation, why not take advantage of the expertise that startup studios offer? Collaborating with a startup studio is a great way to enable you to create a scalable business model that will allow you to get established more quickly.
With a startup studio, you gain access to a network of experts with years of experience dealing with complex issues relevant to your niche. They can assist you in resolving various problems, including conducting market research to ensure your business idea is feasible.
There’s so much more a startup studio can do to help you scale up your business quickly and efficiently. Check out more content on Startup Studio Insider, where we give valuable insights into the startup studio world.
