When looking at various studies on the failure rates of new businesses of any type, attempting a start-up is risky to put it mildly. The numbers are widely varied, but everywhere you look the percentages of casualties are brutal and the wipe-outs happen quickly. Anywhere from 24% to 50% of new businesses don’t make it past 2 years. Indicators suggest as many as 80% of companies will go belly up within 5 years. Enterprising souls still exist in this increasingly digital world willing to do business in the very tenuous world of retail, where small business owners face the hardest work and greatest risk in business start-ups.
The retail industry is particularly vulnerable to sudden collapse because they must process and move inventory constantly. There are a full range of bills to pay: rent on a pedestrian-rich street will be exorbitant, employees must be paid, utilities, taxes, invoices for inventory, and so on. All it takes is a few slow weeks to get behind for many stores. Their competitors are all around the same street where the pedestrians shop – they would be foolish to open anywhere else. The business volume just has to be shared with nearby stores.