Tapsearch Com EditorBusiness failure rates
March 5th 2011 20:42
Bizarre Politics Reports:
Newspapers like to use Politifact feature to measure fact from fiction but keep ignoring the core of our problems
James F. McCarty, Plain Dealer writer rates the claims of Senator Sherrod Brown about business incubators being able to produce several jobs spending only $10,000 of government money. McCarty's Politfact of the claim, rates Senator Brown's claim as true. It claimed that about 80 percent of the business inclubators are successful versus the usual failure rate for business startups. Usually about 87 percent of all business fail within the first five years.
What sounds to good to be true, usually is not. The Politifact rating is misleading. It takes readers down the wrong path. I search the web just a little bit, and found that there is a difference between business incubators and business accelerators that Politifact rating does not address. I also found that 50 percent of the business incubators are new non-profit endeavors and others are connected to other government programs, academic endeavors and chamber of commerce activities.
In my 60 plus years in the business world, I started several business ventures of my own and was part of several others. Not counting all of the attempts we tried to get off the ground, I was part of 25 businesses and none have survived except for one. The one was Air France which is owned by the French Government. If I counted the attempts to get some business plan off the ground, the number would be about 75 to 100. So no matter how you look at it or measure it , this is a sad commentary about our economy and no business incubator will change things that dramatically.
I also witnessed the closings of about 1,000 computer businesses in just Ohio, Pa. and Mich and more than 100 computer manufacturers. I traveled to the Silicon Valley and witnessed to the devastation of new start ups there. I was part of every computer generator and was involved in many innovative start ups. I helped jump start some high tech companies. The most successful company was the prime innovator of disk storage. They led the industry in this technology and started up more than 30 companies from as "incubators" for other high technology pursuits. They funded Seagate which turned out to be the largest disk storage company in the world.
Our company took their investment out of it to fight off the surge of Japanese competitors that were being supported by our government. Free trade wars came down to industry meetings to decide standards. However, this was just a cover for knocking out competition. Our company survival was based on being awarded the standard. Our company's standard was the result of many years of design and innovations. It led the entire industry in the creation of disk storage media. Our company was in danger of losing it all and our president was not willing to compromise by moving production outside of the U.S. Our president considered this to be a war and in the end he lost it. The 30 new company startups failed too without any money left to support them. A Japanese company was rewarded the standard.
The U.S. disk storage spin off company jumped on the global economy band wagon and joined the global economy completely. It was called free trade. They ended up with about 100,000 workers with only 10,000 in the U.S. The others were in Malaysia and other far east countries. Later, the competitive factors hit hard and 20,000 workers had to be cut out of the picture in the early 2000. I do not know the details but many more later lost their jobs too. This I do know. Everytime a factory is moved a burn out community is left behind. In the far east, this means complete devastation for populations. There are no backup systems ready to take their place.
In my experience, the best companies failed and the worst ones survived. With this is the real world of business, the Politifact measuring and rating with the untold distinctions is a disservice. I was a trouble shooter supplyer for many major corporations and high technology companies including industrial computer manufacturers. For the most part they are gone. In the real world, it takes about $250,000 dollars in sales or revenues to create just one $25,000 a year job. This means that the just one small business incubators supposedly creating 70 local jobs is impossible. The whole program has only invested 12 millions dollars and nothing is said about this money being repaid. About 87 percent of all business startups ( that get off the ground) still fail within the first five years no matter what. This is our rating from the real world of the streets.
What sounds to good to be true, usually is not. The Politifact rating is misleading. It takes readers down the wrong path. I search the web just a little bit, and found that there is a difference between business incubators and business accelerators that Politifact rating does not address. I also found that 50 percent of the business incubators are new non-profit endeavors and others are connected to other government programs, academic endeavors and chamber of commerce activities.
In my 60 plus years in the business world, I started several business ventures of my own and was part of several others. Not counting all of the attempts we tried to get off the ground, I was part of 25 businesses and none have survived except for one. The one was Air France which is owned by the French Government. If I counted the attempts to get some business plan off the ground, the number would be about 75 to 100. So no matter how you look at it or measure it , this is a sad commentary about our economy and no business incubator will change things that dramatically.
I also witnessed the closings of about 1,000 computer businesses in just Ohio, Pa. and Mich and more than 100 computer manufacturers. I traveled to the Silicon Valley and witnessed to the devastation of new start ups there. I was part of every computer generator and was involved in many innovative start ups. I helped jump start some high tech companies. The most successful company was the prime innovator of disk storage. They led the industry in this technology and started up more than 30 companies from as "incubators" for other high technology pursuits. They funded Seagate which turned out to be the largest disk storage company in the world.
Our company took their investment out of it to fight off the surge of Japanese competitors that were being supported by our government. Free trade wars came down to industry meetings to decide standards. However, this was just a cover for knocking out competition. Our company survival was based on being awarded the standard. Our company's standard was the result of many years of design and innovations. It led the entire industry in the creation of disk storage media. Our company was in danger of losing it all and our president was not willing to compromise by moving production outside of the U.S. Our president considered this to be a war and in the end he lost it. The 30 new company startups failed too without any money left to support them. A Japanese company was rewarded the standard.
The U.S. disk storage spin off company jumped on the global economy band wagon and joined the global economy completely. It was called free trade. They ended up with about 100,000 workers with only 10,000 in the U.S. The others were in Malaysia and other far east countries. Later, the competitive factors hit hard and 20,000 workers had to be cut out of the picture in the early 2000. I do not know the details but many more later lost their jobs too. This I do know. Everytime a factory is moved a burn out community is left behind. In the far east, this means complete devastation for populations. There are no backup systems ready to take their place.
In my experience, the best companies failed and the worst ones survived. With this is the real world of business, the Politifact measuring and rating with the untold distinctions is a disservice. I was a trouble shooter supplyer for many major corporations and high technology companies including industrial computer manufacturers. For the most part they are gone. In the real world, it takes about $250,000 dollars in sales or revenues to create just one $25,000 a year job. This means that the just one small business incubators supposedly creating 70 local jobs is impossible. The whole program has only invested 12 millions dollars and nothing is said about this money being repaid. About 87 percent of all business startups ( that get off the ground) still fail within the first five years no matter what. This is our rating from the real world of the streets.
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