The difference between small and big businesses

Research, experience and life has shown that most businesses are created equal and that most business owners (being a certain type of person) have the ability to grow their businesses from small entities into larger enterprises.  You may be asking yourself “then why do 90% of businesses fail and another 8% stay small businesses indefinitely”?

There isn’t anything wrong with having a small business, but let’s be honest, most of us start businesses with greatness in mind and the last thing we think about when starting a business is that we are going to create ourselves a job which will pay less than minimum wage and cost us our health, hair and time.

So, what gets in the way of greatness?  Money! The number one reason for the high rate of business failure is not as obvious as the low barrier to entry and that now a days with the advent of the internet, almost anyone can become a business owner. The real reason for the high failure rate boils down to undercapitalization.

This undercapitalization is made worse by the fact that the typical profile of a business owner is someone who believes in themselves and a lot of the times over estimates what they are capable of. The toxic recipe of not having enough money to get out of the small business stage and the over confidence the business owner has in themselves is the number one and two cause of all business failure in this country.

Even the most cash rich companies in the world know to hoard their cash rather than to use it for operating expenses, expansion etc. Amazon’s recent acquisition of Whole Foods, bought on credit, Apple’s new campus, Financed.  Lenders won’t lend when it doesn’t suit them and we all have the credit crunch of 2008 still fresh in mind. Borrow when you can, when those who lend are willing, save your cash for the days when credit is not available.

First Union offers different types of loan products to suit your businesses needs.  Unsecured loans to loans secured by real estate, we are in the lending mood and we think you should take advantage now while you can. A credit crunch is coming and the economy cannot rise indefinitely without a pull back.  It’s time to position yourself to take market share from your competitors.

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