Week 5 Reading Reflection

This chapter focuses on new venture startups. In recent years there has been an increasing number of new ventures in the United States. Up to 600,000 new firms every year, that is 1,500 business per day. There are several reasons why individuals start companies, but one thing is for sure, there is a high risk of failing within the first year of your business being in operations. That’s why it is important to be aware of certain factors before you dive into your new venture, and factors you should be on the lookout while you are running your business. All this being said, we have to keep in mind that it is very difficult to collect data on new startups. One of the biggest challenges is finding reliable date on startups that fail. I found this point very interesting. If you think about it, if you want to be successful you have to be able to learn not just from your mistakes, other company’s mistakes as well. If we find it difficult to collect data on startup that have failed, how are we supposed to know for sure what caused the business down fall? How are we supposed to lean from our mistakes? The most important thing anyone can take from this chapter is the critical factors that entrepreneurs need to consider when starting a new venture. Each of these factors seem so simple but they aren’t, and they are all so important. Things like the uniqueness of your product, how available your product is, how much capital you need to start your venture and lastly the grown of your sales. If you think of the opposite things of these factors you will get the major reasons ventures fail. Things like product performance, inadequate knowledge of market, undercapitalization and poor timing. Moving on, what I found most interesting about this chapter was the internal and external problems experience by entrepreneurs. When you look at the external ones you see two really big categories and other smaller ones. But what I found interesting was how evenly distributed the percentages where for the internal problems. Leads me to the conclusion that entrepreneurs have to be very well rounded. Sadly when you start a business everything is important and everything needs equal attention. And I honestly think this is one of the main reasons a large percent of starts up fail. They fail to see the bigger picture, you can’t be completely successful if you are just giving 3 out of 5 components of your business your attention. Everything needs to be in sink, because are these factors are interrelated and without one the whole business could fall apart.