Have a Business or Starting a Business and Need An Edge Against the Odds?

The Small Business Administration tells us small businesses fail at a rate of 8 out of 10 (80%) within the first 5 years.  Of the remaining 20% year 80% of them are gone by the 10^th year.  Staggering statics not for the faint hearted who plan to open their own business.  

Money is the number one cause, or more appropriately the lack of money is the number one cause for business failures.  Is it that the business didn’t have enough money, or that the money it had (earned) didn’t go far enough?  Or perhaps the business made enough money to survive but errors resulting in penalties and fines over whelmed the cash flow causing the failure. 

Over the years working with all types of businesses I’ve observed that businesses usually generate enough profit margins to succeed as long as nothing goes wrong.   As long as all their customers pay on time and don’t bounce checks, as long as they don’t miss payments and incur late fees, as long as there’s a steady stream of work and as long as there are no mistakes handling payroll, payroll taxes, garnishments, and other employee related expenses.   In other words as long as everything is perfect.   Perfect plans exist and most start-up businesses conceive perfectly how to execute the plan, but unfortunately perfect execution doesn’t exist, and therein lies the rub.  Stuff happens and when it does businesses fail. 

Recently I was talking with a valued customer we were remembering how long we’ve been working together (since the last century) he pointed out he hired us before he opened his business.  The next day I was visiting with another of our valued customers and he commented about his start.  He’s been a customer for more than six years; he too hired us before his first employee and just days before he began working on a new plant project.  This got me to thinking, of our “startup” customers how many of them are still operating today? 

I have to admit I wasn’t surprised by the results I’ve started other businesses including this one and know that limiting the number of things that can go wrong is extremely important after all plans are perfect it’s the execution that isn’t.   What we found is of the business owners who had decided to start their own business and hired us before they hired employees sixty-one percent (61%) are still in business at five years and of all that passed that milestone and are 10 years old or older 92% are still in business. 

Now I’d love to say that statistic is due to our ability to choose great customers (and we do) but the truth is our customer have an advantage other businesses owners don’t have.  Our customers are able to focus on the “business of their business” that is they can focus on growing their business, training their employees how to be great ambassadors, getting paid on time and all the important revenue generating activities that contribute to the life blood of the business.  Conversely they are not distracted by “the business of employment” and spending precious resources on matters that does not generate any revenue.

Another benefit of our services is we stabilize cash flow.  Cash flow is the life blood of any business and spikes in cash flow demands (like down payments for insurance products) can give a business financial heartburn.   Periodic cash demands for payroll taxes, unemployment taxes and other quarterly or monthly tax demands can also provide cash flow indigestion.  If a business is late on any of these demands then penalties and interest that accrue often outstrip the profit margins of the business leading to failure. 

So there you have it working with us provides stability to businesses by steadying cash flow, lessening the demands of non revenue generating activities and provides owners the ability to focus on growing their business.  You can learn more about our services by visiting our website (www.primaryhroutsourcing.com) and downloading a free report “Increase Profits – Three Steps to Lowering the Cost and Liability Associated with Employees”

I am always at your service,

Rick Matthews