In the current climate with even long established businesses going to the wall and many companies struggling to stay afloat there are increasing number of people being made redundant and many of those people consider starting their own business with their redundancy package.
But most businesses fail within the first year – why is that?
Some people think that running your own business means being able to do what you want to do all the time. That it means waking up at whatever time, staying in your pyjamas all day and taking days off willy nilly. Unfortunately this is pretty much the opposite of the reality of running your own business.
People who start businesses usually work longer hours than those who do 9 – 5 , and a lot of entrepreneurs are naturally workaholics. If you’re choosing starting a business because it’ll be an easy option, it’s the road to disaster.
Lack of Planning
Many startups think they’ve got a good idea, but fail to do the nitty gritty maths and calculations that are required to work out whether it is actually a viable business or not. Sure, projections of new startups are notoriously difficult and can be wildly wrong, but if it’s going to be literally impossible to make it add up, it’s better to see it from abstract calcultaions than a year later in your bank balance.
Another area where inexperienced people fail is by not checking out the competition properly and assuming customers will be battering down their door. Knowing what you’re up against and having a clear reason for people to buy from you instead of them is critical and you don’t want to be discovering your nemesis later down the line.
Businesses need funds to get started. Even starting on a shoestring means having at least a few hundred or thousand. The minimum a business needs to start is a phone, a business card and a website. But most successful business people know that to make a business a success you need to start off by investing.
With the right funding for marketing and giving a professional impression, trust is built quickly and customer bases can be expanded quickly, turning the company into a profit maker rather than having it creep along without breaking even for years.