In fact, the Business Case Studies website claims that as many as one in three start-ups fail in their first three years, but why is this the case? In order to be one of the businesses that goes on to not only survive, but also prosper, take a look at these six ways to avoid failure in a competitive world:
Carry out market research
Many assume that lack of funding or the wrong team are the main reasons behind business failure. However, planning and research are crucial when it comes to ensuring your business idea is feasible, your pricing is competitive and you will receive an adequate return on investment. Spend time researching your business idea and whether there is a call for your product or services; although research reports can sometimes be prohibitively expensive for start-ups, university papers and blog posts can help you. Listen to feedback from customers and business associates you trust (not friend and family, who sometimes avoid giving their true opinion in case it causes offence), as their perspectives can prove invaluable.
Have a solid business plan
It may be a cliché, but there is a lot of truth in the phrase “failing to prepare is preparing to fail”. All start-ups require a carefully thought-out business plan that has realistic and educated projections for the future. Structure in the early stages will prove to be fundamentally important, but many start-up businesses fail because they set their sights too high or diversify too soon. Speak to your bank or download the template from the Government’s website.
Manage your finances
Financial management is crucial for start-up businesses of all shapes and sizes. If you lack capital and a contingency plan you can leave yourself in a situation where your business will be unable to develop. Businesses that fail to seek professional advice may find that their financial troubles worsen. Use an accountant – online or face-to-face – to help you borrow and manage money in a cost-effective way.
Hire a good team
Having a quality team of people to work alongside you is paramount to the success of your new business. Recruiting requires careful consideration in order to ensure each employee is bringing a new skill to your business. The same goes for your business partner; they should be as passionate as you are and have skills and knowledge that complements yours.
Market your business
If you don’t shout about your business, no one else is going to do it for you. Make use of all marketing channels – from having a professional website to utilising social media – in order to drive your business forward; using one channel in isolation is unlikely to deliver the results you want. It’s always wise to read the stories of other successful entrepreneurs who were once in your position for inspiration and advice.
Manage your risks
It’s important not to take shortcuts when it comes to your start-up business. Insurance is a common oversight, but so many businesses can be crippled by a hefty pay out before it’s even had a chance to get off the ground. Avoid this happening to you by protecting your business with the correct insurance for start-ups.
