When it comes to starting a business, construction appears to be a popular choice. That’s according to the 2015 State of the Startup study we recently completed here at Sage.
To find out what’s happening with startups, we talked with 524 company founders who have been in business for less than five years. One-third of those companies were less than 12 months old. The study also included the perspectives of 102 senior executives at organizations that nurture new businesses.
Construction was one of the top three industry segments for startups, according to our Sage research. With the growth in construction starts over the past few years, I wasn’t surprised to see construction at the head of the list. In fact a little over a year ago, trade contractors, in particular, were considered one of the fastest growing small business industries.
While men are more likely to start a construction business, the study revealed women are a third more likely to found a startup overall, particularly in the retail and health care spaces. Another interesting stat is the age of those who take the startup plunge, with more than half of founders classified as Gen Xers (those 30 to 50 years old).
The research also sought to understand why many new businesses struggle while others prosper. This is particularly relevant to construction, which has one of the highest failure rates, according to Statisticbrain.com. By contrasting top performers with low performers, our Sage study analyzed the difference in business practices to come up with these tips for success:
- Take on a partner. When you have a partner to share the day-to-day business tasks, you free up time for brainstorms and decision making, and have someone to collaborate with on more creative pursuits.
- Don’t skip the business plan. The most successful founders were 78 percent more likely to have created a formal business plan before launching their new business.
- Enlist the help of professional advisors. The best startups lean on the wisdom and experience of trusted advisors such as accountants and mentors.
- Embrace the latest marketing tactics. Today’s top entrepreneurs are masters of websites, social media, forums, and all the latest marketing tactics.
- Finally, BALANCE! The most successful entrepreneurs were 58 percent more likely to report they commit themselves to family, friends, and personal pursuits.
The study provides a variety of other insights including the three things new businesses often struggle with: growing revenue, adding customers, and producing accurate financials. For the full report, download it here.