Thursday, March 02, 2017

The Big Question: Why Do So Many Startups Fail?


It’s a loaded question, why do startups fail? Is it due to any one reason? Is the bane of small businesses to have to struggle their way through the difficult first few years, for it to blow up in their face due to some other big business stealing their thunder? The vast majority of startups seem to fall flat on their face, and I don’t say this as a reason to avoid ever starting or progressing any further, it’s to take these problems and turn them into solutions. The major companies have their hardships too, and you can take refuge in this, but what are some of the most common issues you can encounter, and more importantly, how can you change this to prevent it happening to your company? 

Money… 

There's always something about money being the root cause of any minute business problem. Lack of funding for equipment or not being able to plow it back into the business are two standard issue business dilemmas. While everything to an extent relies on the suitable funds to carry the business through, the amount of financial resources available to startups means that there are numerous options to try, and there are many government schemes that are now dedicating themselves to aiding the ailing startup company. But with the amount of schemes, does this mean that you would struggle against the amount of startups that must be around? Not necessarily. While the market for startup companies are considerably higher than a few years ago, this merely means that you need to research into what financial approaches are right for you. Your business needs to strike the right balance of being unique and a good money-spinner in the eyes of the powers that be. There are companies that can buy your customer invoices for funds, like Business Factors, which is known as a non-recourse option of lending, and this is a viable way to get funds quickly if you have had a client miss a payment for the last time. You can read about Business Factors to see if this is something that is a suitable option for you. You have resources available; you just need to know where to look. And there are financial organizations that are incredibly reticent to lend money, but this means that you need to widen your net further. 

Staff… 

A wide, gaping hole in running a startup company. Finding the right people to help support an organization requires a certain amount of faith, both from you as the company owner, and from them as your employee. The nature of a startup company is uncertain, and working with the potential Sword Of Damocles of unemployment over your head is not a pleasant way to work. Business is all about the notion of trust. It colors everything you do when you work with your employees to develop a company. And these people that are working for you clearly saw something in your company to want to work there, whether this was the job role or the company, or a combination of both. And although they came knocking on your door, you need them too. The task of finding, not just a suitable member of staff, but one that will improve the company is what you need to be searching for. You only have a limited number of roles to fill, and when the company is struggling in its infancy, you need those people who are willing to work that little bit extra and are happy to stay in the office on Saturday morning. These types of people are godsends, but how can we get them? They don’t grow on trees! It all comes from you, the manager. The talk of business transparency is a big topic of conversation. Some argue that it’s too much of a holistic term and has no place in hard-nosed business. Quite the opposite. Transparency is not just a heart on your sleeve approach to dealings, but it’s a mindset that should be communicated and implemented from the leader. Open door policies and giving people the opportunity to understand what the common goal is are key ideals to generating a unified and cooperative workforce. Communicating your vision clearly will give everyone an idea of your intentions, and in doing that as openly and honestly as you can, you will inspire trust. And that is what you need more than anything from your staff. 

Marketing… 

Advertising is all about getting the product to the customer in a way that makes them need it to complete their life, that they were missing something before it entered their existence. Marketing is something that can work tirelessly for you if you have the right tools. If you are just taking stabs in the dark, it can be a long and difficult affair. The mistake many small businesses make is that they think going to social media and tirelessly plugging their company will pay dividends. This is one tiny fraction of the whole task. You really need to go back to come forward in this case. Finding your voice is one approach that may need a little more fine-tuning, and I say this because once you really understand what it is that your business and product are about, then everything else falls in line. You can understand your target market, you know what channels to promote through, and you will have a profound knowledge of how to build on your company. It sounds like something you don’t need to do for years, but if you find your business voice now, it will dictate your brand, which will dictate your image, which will dictate how you market your product! It sounds simple, but it can take quite some time to find what you really want to communicate. But once it hits, it makes everything else in the marketing department so much easier. It can be a hard slog to get your business into the wider public consciousness, and it can be even more difficult for younger companies, but by addressing these three issues in advance, you can start to capitalize on every aspect.

No comments:

Post a Comment