Are you part of a startup? If so, thanks for the innovative new ideas, exciting new technology and the three million jobs first year startups create!
With the costs and barriers of marketing and growing a business getting easier and easier to overcome, fast-growing startup companies have been rapidly increasing. Much of this activity is largely due to the emergence of the internet, which paved the way for internet marketing and growth hacking. In fact, the number of small businesses in the U.S. has increased 49% since 1982. A good percentage of that growth has come from tech companies. High-tech firm creation was 69% higher in 2011 than in 1980.
These statistics come from a recent infographic by SurePayroll that gives some great insights into the current startup environment. If you are working to grow your startup company or are trying to start one, here are some findings that can help you understand what to expect.
If you are on your first startup and are feeling overwhelmed by your lack of experience, don’t despair! Studies show that 67% of founders are also currently working on their first startup. The key is to learn and adapt quickly and surround yourself with talented people who can help.
If you are delaying the launch of your new company because you don’t feel ready or you feel you need more experience, you may not want to wait. The people who produce the most startups are 25-44 years old. While preparation can be a good thing, you’ll gain the real experience you need after you dive in.
Only the Strong Survive
After one year, 25% of startups fail; after two years, 36%; and after three years 44% have failed. Choosing to bet on yourself is a risky proposition that many businesses don’t succeed at. The number of companies still operating after four years varies slightly depending on industry. Finance, insurance and real estate are the most risk-free with 58% of companies lasting.
While these numbers may dissuade some people away from the startup life, it shouldn’t necessarily scare you. With 35% of startups making it to 10 years, it is clear that the strong survive. If you have a good offering, a good strategy and a clear goal, you have a good chance of being part of that group. But that doesn’t mean you’re going to get rich doing it…
Show Me the Money
Many founders venture into the startup arena because they have an amazing idea or want the freedom of being their own boss. For others, it’s the promise of rich reward. However, those people may be facing a long road ahead.
According to SurePayroll, 73% of startup founders make less than $50,000 per year. Until your startup starts making more than $10K per month, a $50K salary continues to be the average. But this can be difficult for a growing company. In fact, only 58% of executives met or exceeded their revenue targets in 2012.
The average founder’s salary increases as the founder gets older, more experienced and has the support of more team members.
As a B2B inbound marketing agency, we have the privilege of working with many startups. The ones who grow past the 35%, 10 year mark and last are the ones who have a clear strategy in place. If you’re part of a startup – or are thinking of starting one – keep these findings in mind. Knowing the outlook of the startup community can help you formulate a plan that will grow your business!