“Nine out of 10 new businesses fail in their first year.” How many times have you seen or heard that statistic? Has it stopped you from leaving your job and pursuing your entrepreneurial dreams?

It’s one that deters many from ever realising their dreams of business ownership. Yet it isn’t accurate. This business myth arose from mistaken data analysis done in the 1990s and it’s been perpetuated since then by those that don’t do their due diligence when it comes to research and sources. The truth paints a much more optimistic picture.

Professional researcher Moya K. Mason found that two-thirds of new employer firms survive at least two years and about 50 per cent survive at least four years. According to the US Small Business Administration, about half of new businesses are still active in their fifth year and 33 per cent survive more than 10 years. Statistic Brain Research Institute reports that only 25 per cent of new businesses fail in the first year and 45 per cent are still thriving in their fifth year.

Mason also found that only one-third of new businesses fail and one-third of businesses close under conditions the owners consider successful. Business failure isn’t the same as business closure. Many SMEs close because the owner has retired, sold their business or gone on to a new venture. In many cases, these businesses were profitable at close.

What does cause new businesses to fail? Lack of planning and proper marketing strategy, faulty business models and lack of market research are major contributors. In terms of failures due to management, Statistic Brain research finds that going into business for the wrong reasons, relying on advice from just family and friends, lack of market awareness or clear focus and falling in love with the business idea (being blinded to the realities of the market and customer value points) will also derail a new business.

In the UAE, low levels of innovation, international orientation, IT adoption and limited networks can damage small business success rates. That’s why entrepreneurial education is invaluable. If you want to start your own business:

* Learn about your industry and market trends. Don’t take what you already know about the field or what others say to do for granted.

* Take care to evaluate what trends are just a flash in the pan or on their way are out. Take care not to enter overcrowded markets or offer anything others are already doing. Be aware of the biases and assumptions that may cloud your own judgement or the opinions of others.

* Take the time to do a self-evaluation. What are your strengths and weaknesses? How will you leverage your strengths and compensate for your lack of education, know-how, ability or skills in your business? What unique niche can you launch based on your strengths, interests and market trends? The most successful small business owners build enterprises based on the intersection of their strengths and passions, education and skills, market viability and personal values.

* Networking is vital for successful small businesses. Don’t rely on those that will tell you only what you want to hear. Attend events that expose you to insights from others, both within your industry and across industries. Networking leads to out-of-the box innovation and can result in many collaborative and value-multiplying partnerships.

* Build an agile and responsive business model and marketing strategy. Successful business models are those that rely on built-in tracking and measurement of trends and opportunities for scaling and growth. Devise a marketing strategy that builds and promotes your unique brand and makes use of eCommerce and the global reach of the internet.

* Find out where your customers are, what they like and what marketing strategies will reach them.

* Understand what you’re offering. Great ideas often go to the grave. Take care to understand who your customers are and why they would want or need your product or services. Be sure that you communicate value according to their problems and perspective rather than relying on your own.

* Develop your offerings and price points based on emotional components of value rather than simply competing with other businesses based on price or function.

The good news is that the entrepreneurial ecosystem is flourishing in the UAE. Multiple initiatives, ranging from improving lending laws to promoting innovation, entrepreneurial skills education and IT adoption abound in the UAE today.

From Dubai SME and the Khalifa Fund to the SEED Entrepreneurship Centre and the Millionaire Summit, there are invaluable resources available for aspiring entrepreneurs that can help you build a thriving business.

The writer is an entrepreneurship educator and start-up specialist.