Sunday, February 1, 2015

Are there 3 kinds of businesses?

Land - the panacea for business success? I doubt it.
Photo Credit: CIFOR via Compfight cc
I was reading this post on Meltfund about the 3 kinds of businesses that exist. It says:
  1. 95% will fail within 5 years. Wrong!
  2. 45 will survive far longer. Wrong!
  3. 1% who are fully aware and guaranteed success survive. Wrong!
Actually, the above post must have been inspired by Sen. Rand Paul's statement on CNN criticizing Obama on his statement that 9 out of 10 businesses fail.

The actual facts are stated on the Washington Post's news story:
  1. 50% of new businesses survive to the fifth year.
  2. About 30% the tenth year.
  3. Land is not the central reason for business success or failure. Land is a panacea for success in third world countries faced with inefficiencies and poverty.
The goal of rent seekers is to create a monopoly. Monopolies could be double-edged swords, especially where rent control, price control and legislation against oligarchs exist and is enforced.