In all my years as an advisor, I’ve seen businesses start up and fail more times than I would have liked. Here are a few common reasons why:
- Lack of research. Whether it their products or services, customers, competitors or the wider industry/sector. Businesses often chase the uniqueness of a product or service rather than the value to the customer. Remember the Sinclair C5? Look at things from your customers’ perspective and if in doubt ask them. Remember to be aware of any potential pitfalls regarding intellectual property – which means protecting your own and making sure you don’t infringe someone else’s, of course.
- Underestimating time required. A high percentage of start-up failures I have had experienced have failed because of time. Not time in the sense of time-management, but time it takes to develop, launch and gain enough momentum behind a product or service. Do not underestimate how long this will take.
- Lack of passion or motivation. Only start a business if you genuinely have a passion for the idea. I’ve seen too many businesses struggle only for the owner to give up because they don’t have the necessary passion or motivation.
- Ostrich mentality. When things get difficult, burying your head in the sand and trying to ignore problems will not make them go away. Generally, they get worse. There’s lots of help available for small-business owners and none of the help that exists out there will judge you or think any worse of you for admitting you need a hand. Don’t be too proud to seek advice. Even the most experienced and famous business owners have business advisors and mentors.
- Lack of cash. The classic reason. Cash is the lifeblood of business. As you know, if you don’t have enough blood in your body, soon you’ll become very sick and you could even die. Similarly, if you don’t have access to enough cash when you need it, your business won’t last. Plan effectively and regularly and keep a constant communication with your bank manager and accountant.
Stuart Hartley is senior consultant and manager of the Corby Enterprise Centre in Northants.