There a number of key reasons why start-up businesses fail. Knowing these pitfalls can help you avoid them when setting up your new business.
1. Misguidance & Lack of Feasibility - starting up a business for the wrong reasons
You must be committed to the business and aware of the challenges that lie ahead. Confidence in your ideas will spur others on but cannot be the sole reason for the venture, your business venture must be feasible. You must truly believe that the business has potential, that there is a market for your product or service and that you have a unique offering.
2. Poor Management - lack of vital skills
Start-up businesses regularly fail due to entrepreneurs feeling that they know best. The best thing you can do to avoid that is to target people who can help fill your skill gap. For example, if you are a product expert, you may lack the skills needed to market your product or you may be unaware of the financial and taxation requirements to run your business. At Amatino Partners, we can help you through this challenging time by supporting you with our Business Advisory and SME expertise.
3. Insufficient Capital
Lack of cash flow is one of the main reasons for new and existing businesses to fail. Our Business Advisory department can help you create a detailed plan which will take into account the resources and capital finance you will need for your business to succeed and grow. We can also help you find investors, secure support from financial institution and capitalise on state agency grant support.
The location of your business is very important to your success. The importance of this will depend on the product or service you are offering. For example, for a retailer, the location is vital whereas location may not be as important to a service business. Assessing a location should take into account, the number of competitors in the area, the infrastructure, passing trade, traffic, parking and appearance of the building.
5. Lack of a detailed Business Plan
Remember, failing to plan, is planning to fail! A good business plan should cover all areas of setting up a new business including:
- Finance & Budget Plan (sales forecasts, expenses, investments, cash flow)
- Description of the business, company goals and mission
- Employment requirements
- Marketing, Advertising and Promotional activities
- Competitive Analysis
- Contingency Plan - highlight potential issues and remedies to overcome them
Contact Us if you are interested in setting up your own business and we will help you avoid these issues and grow your business.