Those two data points are extremely anecdotal and have survivorship bias. According to data I can find online, in 2021 while 549 breweries opened, 319 closed. As the number of breweries has gone up each year, a significant amount of closures also occurred. Your neighbor could have easily been one of those.
More than 50% of small businesses fail in the first year of business according to well published and cited industry data. These are all people who tried to "invent their own futures" and it did not work out. That also doesn't mean that the remaining percentage were successful. Many of them have their owners working much more than corporate full time for less money then they'd be working on a cushy 9-5 job.
For an opposite anecdote to yours, a family opened up an ice cream shop around the corner. They had good business and made ok money, but closed after 2 years. Why? Not only was the end of the day profit not great, they were heavily sacrificing time with their own family in order to run the day to day operations. They could have hired more people to handle those day to day hurdles, but that would have meant almost no take home pay.
We should encourage people to "invent their own futures" but we also have to be realistic, because we don't have good safety nets for what happens when inventing your future fails, which means you have to make your own safety net. It's also not always trivial to re-enter corporate gigs after you've been doing something else for years, especially if closing of your small business has burned you out.
It takes much more than just a good idea to make a small business succeed.
In my experience with local businesses (alt-weekly newspaper for the college / queer bar scene), the same people were starting clubs that lasted for a year or two, then closed, then they started up a new one. It was about trying out a new business plan that may or may not work and if it doesn't, clearing the slate and starting over.
The people who succeeded eventually landed on one with staying power, and the people who didn't eventually gave up. I bring it up to say that a single owner can be responsible for multiple business failures, and like you say, no one remembers those once you're successful.
I am 36 and working on my 4th company over a period of 16 years. I've started even more projects that never materialized into companies. I worked for 4 years at a startup in-between failures. Besides working at the startup, I made minimum wage or less (12/16 years).
I'm 4 years into my current company, and things are just beginning to work.
it depends on the scale. want to start a small cafe in a strip mall? if the mall has some unleased space, and is having problem filling it, you can cut a deal.
my BIL did this, and negotiated a 5 year lease for a percent of his gross sales.
the burger joint took off, and the landlord is very happy...he is paying twice the going rate due to success.
the landlord took the risk, could have been $0.
second hand restaurant equipment can be bought at a discount. food suppliers offer credit, 30 - 60 days.
if you are willing to put in the work, there are ways to get started other than borrowing money from a bank.
Nobody likes the pull your self up by your own boot straps advice, but it works.
I know many people who started with nothing but being the best right hand person they could. They ended up with the business one way or another when the owner retired. I personally can think of 3 like that without trying.
The rule of incorporation in the US is to minimize the cost of failure to the individual.
> if the mall has some unleased space, and is having problem filling it, you can cut a deal.
> and negotiated a 5 year lease for a percent of his gross sales.
> the landlord took the risk, could have been $0.
Gross sales. That's sales before expenses. Your brother-in-law took on literally all the risk in this scenario. Unless the zombie apocalypse started in that very mall, any store was going to sell some burgers and your brother-in-law was going to be paying out to the landlord before he had covered his own costs.
Yep. You got it. No upfront investment, all the risk.
But, he had ran a similar operation before. So he had an idea of what needed to be done, and how to do it.
That’s not how banks work. They will want you to either buy in or put up collateral. You can’t just walk into a bank, say “here’s the detailed plan for my club, please give me a $100 000 unsecured loan.”
Note that you can buy in via personal debt, but that is not “leave with nothing”.
This very website managed to summarize what's going on in reality back in 2017 and it remains completely true.
Because you simply go "oh they just keep trying" and I'm sitting here thinking, "well that's interesting, they're losing all this money and can just keep trying?"
The moral really comes down to this: Those who keep on challenging despite failures have a chance at finding success; those who fear failure and don't challenge will never find success.
There's an old saying that goes: "Where there's a will, there's a way."
You won't find success if you are always playing the victim card, complaining that it's the state or some big bad boogeymen oppressing you from challenging yourself.
Escaping unstable living situations by repeatedly grinding through improbable moonshots, requires you to have the emotional and financial stability necessary to repeatedly expend effort and money on attempts that fail to pay off. This can be achieved through self-worth produced by a supportive and non-traumatic upbringing, a financial safety net, finding ways to make daily life more worthwhile and recharging, and/or loved ones acting as an emotional support network. For people without this, attempting stressful tasks will only destabilize your living situation and result in burnout and suffering.
They were on your side all along, otherwise they wouldn't have bothered with the uncomfortable conversation about how they don't think your idea is going to be successful.
I really dislike stats like these, because it doesn't show the odds of getting a cushy corporate job. About 10% of the people who did a diploma with me took a technical job. Many went on to become insurance agents, HR, real estate agents, selling food, and so on. Some figured out that they can't make it as an architect or engineer, and start successful bakeries. If you choose to live outside a major town, your odds of getting a corporate job are probably lower than your odds of running a brewery.
People today talk about FAANG jobs and such but right after I graduated, all of FAANG (except Apple) were crazy oversized startups losing money. I was one of the few who stuck it out in the tech industry because I just wanted to program for a living, and I was willing to take lower salaries doing PHP than I would working at KFC. I ended up freelancing for about 5 years because many employers couldn't figure out how to make apps profitably, right until venture capital came to the country and the first unicorns appeared.
Even if you fail you learn so much in the process. I’ve had many failures in my entrepreneurial career, but during those failures I earned a salary, I had health insurance, and even in the “failure” acquisitions I had jobs despite no shareholder payout.
And now I have way less fear, way more risk tolerance, so much knowledge about things. Taking risks and doing new things is less risky to me because I can always make my own future. I have enough connections and history to take jobs, or raise capital for something new. It might work, it might not, but I’m willing to try and it’s so much more fun. Of course I want the lottery ticket but I’ve had enough singles and doubles to be very comfortable. It required many 60 hour weeks and sacrifices but I feel so alive, all the time.
My immigrant parents worked their ass off in their small business, 24/7. No health insurance, no benefits, and no barely anytime to spend with their kids.
More than 50% of small businesses fail in the first year of business according to well published and cited industry data. These are all people who tried to "invent their own futures" and it did not work out. That also doesn't mean that the remaining percentage were successful. Many of them have their owners working much more than corporate full time for less money then they'd be working on a cushy 9-5 job.
For an opposite anecdote to yours, a family opened up an ice cream shop around the corner. They had good business and made ok money, but closed after 2 years. Why? Not only was the end of the day profit not great, they were heavily sacrificing time with their own family in order to run the day to day operations. They could have hired more people to handle those day to day hurdles, but that would have meant almost no take home pay.
We should encourage people to "invent their own futures" but we also have to be realistic, because we don't have good safety nets for what happens when inventing your future fails, which means you have to make your own safety net. It's also not always trivial to re-enter corporate gigs after you've been doing something else for years, especially if closing of your small business has burned you out.
It takes much more than just a good idea to make a small business succeed.