In the world of entrepreneurship, standards and good statistical information are lacking. It is a common myth that only 1 out of 10 businesses succeed. In fact, according to research from the Bureau of Labor Statistics, around 45% of new firms survive their first 4 years. Given that entrepreneurs often consider inaccurate information when deciding to start up a company and potentially change their life, it is critical that they be empowered with a better sense of the risk of their venture. That, along with identifying helpful resources, is the intention of the Odds of Success Calculator.

The Odds of Success Calculator is intended to educate entrepreneurs on the complex issue of enterprise risk in terms of rates of failure, primary attributes that influence failure, and resources to help avoid failure. It is not intended, as some may have implied, to produce a score that can be taken to the bank. That level of analysis obviously requires a greater scope of consideration.

That said, the Odds of Success Calculator does generate a meaningful score. While consideration of 30+ risk factors, such as with EquityNet’s Enterprise Analyzer software, is more comprehensive than the 8 factors considered by the Odds of Success Calculator, many respected researchers have found as few as 4 criteria to be statistically significant in predicting success and failure. For example, Dr. Robert Lussier, a serial risk researcher and publisher, noted in a study that “only 4 of the 15 variables [measured] were significant in this study” and that “the [resulting] model will accurately predict the success or failure of a specific business approximately 70 percent of the time.” You can find this Lussier study here: http://www.allbusiness.com/accounting-reporting/budget-budget-forecasting/495836-1.html