maybe they should lower the $800 annual tax of starting an LLC here, and chill out on threatening that a Wyoming LLC will get you in deep trouble
40% of California's small businesses died in the last two years
81–90 of 93 posts
Re: 40% of California's small businesses died in the last two years
#82I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical study that's an unusually convenient/round number, and for a state with the population of California, the chances of that statistic being accurate for any measurement methodology are astronomically small. Sure the dude could've been rounding it, which is totally fi…
Probably more a sad state of professional contractoritis as small business
Re: 40% of California's small businesses died in the last two years
#83How does this relate to any other to year period. AFAIK, most small businesses fail in 2 years. So is this number abnormally high or abnormally low or average? don't see any context. (Of course, the tweet seems to be down. Maybe context existed at one point?)
I was wondering that too. I found this article: https://advisorsmith.com/data/small-business-failure-rate/ AdvisorSmith found that 22% of small businesses fail within the first year, 32% fail within the first two years, and 40% fail within the first three years of business. Half (50%) of small businesses fail within the first five years, and two-thirds (66%) fail within ten years.
What's the definition of "fail"? For example, I had a business that closed because profit dried up, but overall it earned pretty good coin for me, while it worked. I wouldn't say it was a "fail".
Re: 40% of California's small businesses died in the last two years
#84I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical study that's an unusually convenient/round number, and for a state with the population of California, the chances of that statistic being accurate for any measurement methodology are astronomically small. Sure the dude could've been rounding it, which is totally fi…
Marc Andreessen spouting off at the mouth about things he doesn't understand?? I can't believe it! /sarcasm
Andreessen has never been associated with "spouting off at the mouth about things he doesn't understand".
What exactly does he not understand, that his betters do?
Re: 40% of California's small businesses died in the last two years
#85Earlier quoted context omitted.
I was wondering that too. I found this article: https://advisorsmith.com/data/small-business-failure-rate/ AdvisorSmith found that 22% of small businesses fail within the first year, 32% fail within the first two years, and 40% fail within the first three years of business. Half (50%) of small businesses fail within the first five years, and two-thirds (66%) fail within ten years.
What's the definition of "fail"? For example, I had a business that closed because profit dried up, but overall it earned pretty good coin for me, while it worked. I wouldn't say it was a "fail".
The whole profit drying up is the failure that is being referred to.
Re: 40% of California's small businesses died in the last two years
#86Earlier quoted context omitted.
he was evaluating an existing business he was essentually running as the accountant to buy. 3 of the people at the table were me: software, a guy in construction, and a guy who installs gym floors and is a local politican. but hey adjuat my narritive to fit your world view. Typos == phone and lack of care
How did I adjust your narrative? You mentioned the bankers and finance guys, not me. Again, plenty of people are interested and excited about starting a business. It's fun! I'm not surprised the construction guy and the politician are involved. But they aren't so interested years later when you're miserable and complaining about your cost increases and explaining it all down to the penny.
HN would be a better place without trolling like this.
Re: 40% of California's small businesses died in the last two years
#87I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical study that's an unusually convenient/round number, and for a state with the population of California, the chances of that statistic being accurate for any measurement methodology are astronomically small. Sure the dude could've been rounding it, which is totally fi…
40% in 2 years is 20% a year. Considering the definition of small businesses, that’s relatively unsurprising. You’d actually imagine more than 1 in 5 giving up in a year.
In any case, 20% a year for first two years, compare SBA data from 2018:
> “According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year.“
So, right on track?
Re: 40% of California's small businesses died in the last two years
#88I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical study that's an unusually convenient/round number, and for a state with the population of California, the chances of that statistic being accurate for any measurement methodology are astronomically small. Sure the dude could've been rounding it, which is totally fi…
40% in 2 years is 20% a year. Considering the definition of small businesses, that’s relatively unsurprising. You’d actually imagine more than 1 in 5 giving up in a year. In any case, 20% a year for first two years, compare SBA data from 2018: > “ According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year.“ So, righ…
> 40% in 2 years is 20% a year.
40% failing over 2 years is 22-23% failing per year—√(0.6) = 0.7745966...—but close enough.
Re: 40% of California's small businesses died in the last two years
#89Earlier quoted context omitted.
Marc Andreessen spouting off at the mouth about things he doesn't understand?? I can't believe it! /sarcasm
Andreessen has never been associated with "spouting off at the mouth about things he doesn't understand". What exactly does he not understand, that his betters do?
That 40% of California businesses failing is right on track with the normal failure rate of businesses pre-pandemic.
Re: 40% of California's small businesses died in the last two years
#90I just tried to look at the tweet to see where this data's coming from, but "[...] quoth the server: '404'". But really, forty percent!? For a statistical study that's an unusually convenient/round number, and for a state with the population of California, the chances of that statistic being accurate for any measurement methodology are astronomically small. Sure the dude could've been rounding it, which is totally fi…
40% in 2 years is 20% a year. Considering the definition of small businesses, that’s relatively unsurprising. You’d actually imagine more than 1 in 5 giving up in a year. In any case, 20% a year for first two years, compare SBA data from 2018: > “ According to the Small Business Administration (SBA) Office of Advocacy’s 2018 Frequently Asked Questions, roughly 80% of small businesses survive the first year.“ So, righ…
This feels very wrong. ~40% of new small businesses will fail in 2 years. If 40% of all small businesses fail, that's completely different. If I model a small business surviving for 15 years on average, conditional on surviving the bumpy start, that would imply the equilibrium is
- small businesses started each year ~10% of all small businesses
- ~40% of those fail within the first two years; that's ~4% of the total
- looking at the more mature/stable small businesses, ~12% will churn over that same period
- total expected: 16% of all small businesses failing over a two year period
- therefore the pandemic represents a 250% jump
If you model a startup living for 10 years on average, conditional on surviving the first two years, the pandemic would cause a ~200% jump.
If you model a startup living for 25 years on average, conditional on surviving the first two years, the pandemic would cause a ~500% jump.