We have all heard the cliché that something like 95% of businesses fail in the first 5 years so I wanted to share my own small business success story since I just surpassed my own 5 year milestone a couple days ago.
First, the real 5 year business failure rate is more like 55% according to these statistics and the rate seems to increase every year a company is in business as you can see from this graphic from Statistic Brain.
But, what constitutes failure? And, more importantly, is a business successful just because it hasn’t failed yet?
I don’t think so.
Now that September is over I can officially say I have achieved over 60 consecutive months of profitability and I think that is a better measure of success than just not failing.
I remember clearly when I started keeping track back in September of 2009. I had just taken a 6 month leave of absence from my job at Lockheed Martin Corporation in Virginia so I could move to Colorado to be closer to my family and my job search.
About 7 months prior to the move however, I began running ads on a web site I had started as another “side project” business. Once the chaos of the move was over I tried to settle back into my job search when I received another check from running ads on my new web site.
The checks came from various sources and were based on web traffic, clicks and sales. They seemed to be getting bigger.
I looked at bank statements for my business account and realized that a small upward trend seemed to be forming just over the past few months. My business account had over $2k dollars in it by that point and a very high percentage of the revenue was profit!
But, I was in uncharted waters so I didn’t know if the checks would stop or shrink in the months to come, so that’s when I decided to keep track of my monthly profit and loss.
After that, I found it difficult to look for a job and more exciting growing my web traffic and even started a couple more web sites. By December I bought a new $1500 laptop for the business and still remained profitable that month.
By the time my 6 months of leave from my job was finished I hadn’t found a new job yet, but it didn’t matter because by that time I was making almost the same amount of money as I was as an electrical engineer before I took leave. Meanwhile the economy was tanking and good engineering jobs were hard to find.
I decided to quit my job, focus on my business and see how far I could take it.
It seemed I had finally realized a goal I had since about the mid 1990’s which was to start a successful business. There are many measures of a successful business, but to me it means something that can pay the bills, gives me control over my schedule and has more income potential than an average job.
Sometime in 2010 I reached another goal of mine which was to have my first $10k+ month. I somewhat hesitantly took the entire family out to dinner to celebrate because that’s what I had planned to do when I reached that goal.
Privately I was a little frightened by fear of the unknown and some weaknesses in my business model. I didn’t feel very comfortable celebrating.
Looking back over 5 years some of my fears came true and some did not. I managed to persevere and after generating millions in sales for my advertisers and hundreds of thousands of dollars of revenue and profit for my own business, I am still here.
But, I’m not where I want to be. Not by a long shot.
It wasn’t for lack of trying. I tried a few different things in the past 5 years that I hoped would scale better. The only thing I didn’t do was take out any loans, or seek funding through investors.
So, I have not successfully scaled a business yet. I will keep trying.
Overall, I probably could have made more money as an electrical engineer by this point, but not enough to realize dreams and goals that excite me more than the good life.
In order to accomplish these goals I will be dipping into my “war chest” this month to buy some capital I will need for more ambitious projects. These large purchases will effectively end my monthly profitability streak, but it’s time to make some changes and try some new things.
Even after 5 years I still feel like I am just getting started because I have learned so much.
The truth for small bootstrapped startups is if you want your own business success story someday you need only to remember 2 things:
- Your goals and dreams define success
- You don’t truly fail until you quit