Starting a new business venture is always an exciting time in anyone’s life. According to the StartUp Britain website, over 455,000 people have decided to set up in business on their own rather than work for somebody else. This month alone (November 2013) there have been over 8,200 new startups in the UK.
They say that necessity is the mother of all invention, and a lot of those new startups I just talked about feel that they have a product or service that they can offer consumers which is better than what is out there at the moment.
Although most of those people are probably right, the bad news is that many of those thousands of bright, hardworking individuals won’t have a business by this time next year. You might be forgiven for thinking that it’s because they don’t have enough money to keep going, but the ugly truth is that they had a lack of guidance more than anything else.
Why new startup businesses need guidance more than finance
I know that all new businesses regardless of the industry that they are in, or the products and services they hope to offer consumers and other businesses need money to startup and keep going, but the trouble is many people that run new businesses have little to no experience of running their own firm.
Starting your own business is always a great idea if you have the skills and motivation to succeed, but if you don’t know what you are doing in the business world, this could backfire on you spectacularly!
Here are some of the main reasons why many businesses fail within their first year of trading:
Lack of planning – it is vital that all business startups have a valid business plan in place, as this document is essentially a roadmap that details why the firm has been established, what it plans to offer its customers and why, and how it intends to bring sales in;
Lack of advertising – you would not believe the number of people that have wound their companies up due to little to no sales, but have been surprised by the fact that no-one really knew they existed in the first place;
Lack of experience – unless one of the founders of a company has a great wealth of knowledge and experience in what the firm intends to sell to its customers, and has done plenty of market research, those customers won’t buy anything from the firm;
Rapid expansion – sometimes a business might have an awesome idea which brings in customers by the truckload, but if they haven’t planned for all eventualities (such as requiring additional premises, staff and products) then customers soon lose confidence in the brand and go elsewhere.
These might seem like obvious points to you, but sadly thousands of businesses in the UK end up shutting down because they didn’t do their research and prepare for the launch of their firm correctly. In those cases, it is due to the lack of guidance, such as from experienced business coaching experts like ActionCOACH, that has led to the unwelcome demise of their businesses.