Running your own business is the dream of many here in the UK, and making a move to be your own boss can be as exciting as it is rewarding. However, it is reported that 20% of business start-ups fail within the first year, and 60% fail within the first five years! This happens for many reasons, but we will look at the top ones in this RJF Accounting blog.
When launching a startup, the initial excitement and workload can lead to some planning problems. Most startups focus on the initial passion and rush ahead without planning or forethought for what comes next.
Having a business plan in place might sound all corporate and, for most, just another job that could be skipped, but a solid business plan will help you understand if your business will be viable both in the short and long term. The devil is in the detail, as they say, and having a good business plan will allow you to:
- Define your customer base demographics
- Decide where your business needs to position itself
- Pricing structure
- Cashflow projections
- Financing options
- Set priorities for the business
- Set milestones
Those are just a few of the benefits of a business plan; there are many other benefits, the key ones being if you are looking to raise finance or investment for your new business.
Trying To Do Everything
Outsourcing seems to be a dirty word in the world of startups, be it that it is seen as an additional expense that cannot be justified or that there is a sense that the business owner knows best. Launching a new business will mean you are very busy, no really – there will feel at times like the weight of the planet is resting on your shoulders. So outsourcing some tasks could help your new venture to thrive and survive.
As a business founder, it is unlikely that you will be skilled in everything you need to make your business thrive. Even the top business people in the world have their trusted advisors! There are many tasks that, on the surface, might seem like simple ones to tackle yourself, to name but a few tasks such as:
- Website design
- Social media marketing
- Financial planning
These tasks, on the surface, might seem like simple, quick jobs, but in reality, they can be much more in-depth and time-consuming than first thought.
There is no shame in bringing in outside help from experts in their fields, and in most cases, they will help your business expand and grow more than you do it yourself, and in all cases, will help you save time and money!
Lack Of Data & Research
Data is king in almost every aspect of business, the Amazon and Costa’s of the world all value data above nearly everything and it has allowed them to scale to the size they have. It can be easy to skip over the data and research when launching your new startup, but like the business plan, it makes or break your business.
Data can help you know if your planned location for your business is viable, such as if you need a brick-and-mortar store or are your target demographic is solely online. Do you need to be on TicTok or LinkedIn? Is your pricing point in line with your target audience? There are a million or more data points that can help your business be a success, and knowing just a few of these can help you to thrive and not fail.
Poor management can be anything from financial mishandling to failing to see how the business is being operated is causing problems. This can steam from a lack of time and experience, which ties in with the outsourcing aspect above, or it can just be a lack of research and planning.
Entrepreneurs usually found their business based on a passion or interest, which can significantly benefit and hinder growth. The benefits are that you know the industry, but it can also leave you blind to issues on the horizon.
Helping Your Business Survive
Having the right team and the best advice at your disposal is paramount when launching a business. No one sets out to fail; quite the opposite, but often things can spiral out of control before most business owners know it is happening. Here at RJF Accounting, we are startup experts; we can help you with everything you need to get going, such as raising finance and investor relations and then help you once you are up and running, such as bookkeeping and accounts.
If you are planning to launch a new business, call the team today at 0161 504 0629, email email@example.com or even drop us a WhatsApp, and we can help you get your new venture on the right path to success.