Technology is an ever-increasing element in most businesses. Companies want to set themselves apart by doing things better, faster and differently, and technological solutions often help them accomplish this.
And now, scientists are using technology to predict whether new businesses will be successful.
Broadly, reports describe the development as a tool that uses artificial intelligence and machine-learning models. The models use data from over one million companies to predict the success of a startup company. Some of the data points include the probability that a company will be acquired or get listed on the stock exchange.
Interestingly, one significant piece of information turned out to be a lack of information for a company, which played a sizable role in determining whether a business would fail or be acquired.
Researchers say this ensemble of models correctly assesses a company’s future 90 percent of the time. And they say that the development could help investors as well as business owners.
However, as exciting as this novel approach may be, the fact is that the individuals starting a business have a dramatic impact on whether a company succeeds or fails. What you do or choose not to do when starting your company can wind up having a far more significant effect on the future of your business than data inputs.
Traditional methods to predict success
In the absence of this type of high-tech assessment, parties looking to start a new business in Minnesota or Wisconsin can improve their chances of success by utilizing strategies already at their disposal.
These options can include:
- Selecting the right type of entity
- Creating contracts like noncompetes and nondisclosure agreements
- Drafting reports
- Developing a solid business plan
- Addressing financial matters like taxes and accountability
When small business owners take all these areas into account, they can better position themselves and their new venture for success.