YYes,it takes a ton of hard work & sweat to set up and run a successful enterprise.
You need to sell, manage, administer and stay legal. And look after your customers, suppliers, and everything else.
That might be one reason why, in the UK, many business startups do not to get off the ground at all, and around half of those that launch will fail.
Perhaps there simply isn’t enough support for startups? Or maybe it’s because being good at your day job doesn’t mean that you can crack it in the world of enterprise...
Why so many startups fail
Let’s explore some of the reasons that can cause a business to fail. And while you are reading just remember that through thorough preparation we can all improve our chances of success.
1. Lack of skills
Everyone could benefit from training, but in the startup realm it’s something we often neglect. You wouldn’t start out as a plumber without training and yet we seem to think that running a business is different. Make sure you educate yourself! Why not go and work for the competition for a while before you launch?
2. Little or no market research
Don’t just assume that because you like a product everyone else will. All too many startups launch products or services for which there is no proven demand. Do yourself a favour and spend time researching your market. Even better- get out there, book a market stall or pop-up shop and test your product on real live customers. Don’t even think about launching unless you know your target customers inside out- where they shop, how they like to buy, when they buy and who they currently buy from. Know your stuff!
3. Lack of Finance
It’s an easy trap to fall into; grand plans cost money to execute. Too many startups launch with insufficient funds to see them through the tricky first few months of trading. It doesn’t have to be that way- you can start small and grow it. Or plan big and raise finance. Either way it all boils down to good preparation.
4. Lack of cash-flow
Having the best idea in the world is meaningless if you can’t pay the bills. Make sure you chase late payers and don’t go mad buying things you don’t need or can’t afford. Have you ever noticed how tight rich people are with their money? Stop for a second and consider whether that might be one of the reasons they’re minted?
5. “I fought the law and the law won.”
Don’t “Clash” with the law. Get on the wrong side of HMRC, the VAT man or trading standards and your life will become a misery. Keep it clean, do it right and business can be enjoyable. And yes it’s a pain having to pay your dues to the government but honestly- trying to cut corners will only get you into hot water. Keep it legal.
6. Wrong People
More often than not startup entrepreneurs will employ their mates, family members, or “mini-me’s” (people who are just like you). You don’t need people who look and think like you- you need talent that complements your skills and who will add value to your business. Diverse teams are more creative & productive.
7. No clear marketing plan or strategy
How will you let people know that you exist? How will you make sure that customers know that your product is the best? You need customers and they need to be informed about your product or service. Start developing you marketing strategy today and if you’ve already created one then dust it off and improve on it.
8. Poor planning
How does that saying go? “Measure twice and cut once” or “look before you leap”. You get the idea. Read any blog on starting a business and you will hear it time and time again. Preparation is vital. You need to plan. Not by writing a hundred-page business plan but by testing your product on real customers, listening to their feedback and then refining and improving your plan based on their feedback. Anything else is suicide.
9. Not Getting Help
This is a bit rich because there's not nearly enough help out there from government. And we've got beef with training organisations who think that writing a business plan in four days is all you need to succeed in business. Fact- most business plans are poor. A plan can be short if the preparation is sound and for that you will need help. You will need to change your mindset and listen to others. Get all the help yopu can.
Let's borrow from everyone and make something better.