Caution offers better chance for survival

Maturity and caution win out over energy and verve in the survival battle for new small businesses, according to a survey by Warwick University Business School.

The study also discovered that fewer than one in five small businesses survive their first six years.

The survey, compiled by David Storey and Robert Cressey of the Centre for Small and Medium-Sized Enterprises in association with National Westminster Bank, found that businesses started by 50- to 55-year-olds were more than twice as likely to survive as those begun by people in their early twenties.

And a profile of individuals who start their own businesses showed that they tend to be male and in their early thirties, starting in business sectors in which they have had prior experience.

But there are differences between company founders in 1991 compared with those in 1988; the 1990’s founders are more likely to be older and have managerial experience, although they are less likely to have worked in the same sector.

The survey looked at National Westminster’s business clients who started businesses in 1988. The small business survival rate of less than 20 per cent is considerably worse than indications given by the Government’s figures.

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