6
University Daily Kansan
Campus/Area
Wednesday, Sept. 18, 1985
Expert savs most small firms flop
By Jennifer Benjamin Of the Kansan staff
If people want to take a risk with their money, the odds of winning are better in Las Vegas, Nev., than in a small business, a Kansas City, Mo., accountant said yesterday.
Zac Tapp, the accountant with the Kansas City office of Arthur Young International, said that over a five-year period, nine of every 10 small businesses failed.
Tapp spoke to about 70 people at the Space Technology Center on West Campus. His speech was part of the second annual Entrepreneurs Week, sponsored by the Lawrence Chamber of Commerce.
One of the main reasons businesses fail is that they aren't planned well at the beginning. Tapp said.
The critical periods are during the first year and between the fourth and fifth years, Tapp said. In the first year, most businesses fail because they discover their products don't have a market.
If small businesses collapse after the first four years, Tapp said, the problems come from within.
"Because of inexperience, the management of a small business may make a lot of mistakes during the first years," Tapp said.
"It is much easier to survive in a large corporation than in a small business."Tapp said.
business. The key to success lies in a lot of planning before starting a business and a little luck running it, he said.
Entrepreneurs Week continues through tomorrow, Events, all dealing with business and management, are free and open to the public.
At yesterday's session, Kurt Mueller, director of the Entrepreneurs Group of the Kansas City office of Arthur Young, also spoke.
"It takes a lot of courage and commitment to go into your own business," Mueller said. "The business has to be something that you're totally committed to, and it has to be fun."
Mueller said statistics from the Small Business Administration indicated that more than 75 percent of small business don't survive.
Those mistakes may lead to failure, he said.
But, he said, people can operate successful small businesses if they plan correctly and get the help of experienced entrepreneurs.
"It is important that you don't go into this alone," he said. "Many mistakes businesses make are simple ones that can be easily avoided."
Although accountants, attorneys and bankers will help the small businessman, Mueller said, no one will share in the risk of starting a business.
"If the planning is done correctly, the rewards will certainly outweigh the risks," he said.
the risk. Chris Powell, Overland Park junior, said he was ready to take the risk of starting a business.
He and four friends want to start a disc jockey business to play at campus parties, he said, so he attended yesterday's meeting to learn about small businesses.
Powell said he enjoyed working at parties and wasn't discouraged by the odds of success.
But Evan Wooton, Overland Park senior, said starting a business seemed discouraging.
"I've always had an interest to start a business of my own," he said. "The speeches opened up my eyes to the process of starting a business.
"It seems dismal. But true entrepreneurs aren't discouraged by that."
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