Management Skills, not Capital, Predict Success

It doesn’t really matter how much startup capital you have. Startup capital is NOT the leading predictor of success, according to Inc Magazine. PDF report here with facts and figures. What matters more is your ability to manage a growing business.

Inc Magazine studied the companies in its Inc 500 list. Companies that started with less than $1,000 were as likely to be successful as those that started with more than $100,000.

Now, it’s true that companies which started with more than $100,000 grew larger and faster. That’s probably because they could afford to hire employees faster.

However, the companies that started with the most capital were actually less profitable on average than those that started with little capital.

Which says a lot about managing to a tight budget, doesn’t it? When you get used to squeezing every penny, those habits carry on and make the difference in profitability.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.