PRESS RELEASE
A surveys carried out by Government Statistics Office states that over one third of all new business start ups fail in the first three years.
A further study, carried out by Northamptonshire based New Start Business Services Ltd, reveals that the main reasons for failure falls into four catagories:
1. Lack of control due to poor bookkeeping. Most new, small or one man, businesses only keep the most rudimentary records. It is only after their accountant puts it all together, sometimes up to nine months after their year end, that they know how well, or badly they have done. Much too late to take any corrective action.
2. Not enough time given to pre-start planning. The business plan, if done at all, was generally low on real detail. Filled more with dreams and hopes than hard facts. This caused many problems when reality did not meet with expectations. Problems such as cashflow to cover the lean times in the startup period, leading to having to cut corners on service, on advertising and getting a bad credit record with suppliers.
3. Incomplete or no market research. This gave rise to uncompetitive pricing, entering a crowded market and unrealistic expectations of sales and growth.
4. Not suited to self employment. Amazingly, many people admitted that after they had sunk their savings into a business venture, they realised that it was not what they really wanted. They craved the security, however illusionary, of fulltime employment. They just did not spend enough time thinking it through before taking the plunge.
Interestingly, lack of ability or skill was not a major cause of failure. Almost all the people interviewed could carry out their work to a high standard. It was the skills outside their area�s of expertise that let them down.
The point of this article is not to discourage people from starting their own business. Quite the reverse, all the skills needed to avoid the problems in points one to three above can be learned or bought from outside agencies. But, whichever method is adopted, they must be addressed in order to ensure success. Point four must be considered very, very carefully before you even consider starting your own business.
Some Do�s & Don�t�s
� Do give yourself plenty of time to think it all through.
� Don�t assume that because you love what you do, everyone else will.
� Do get all the free advice you can. Banks, Enterprise Agencies, Business links,
� Don�t saddle yourself with expensive premises or unnecessary frills of any kind. Start �Lean & Mean�.
� Do in depth market research of your area. Know your potential customers.
� Do have confidence. Remember, even with the above statistics, two thirds make it past year three.
Finally, a little checklist which many of my clients have found helpful in their start up phase:
What I Must Know to Start.
1. Am I doing the right thing for me.
2. What are my goals for one year
3. What are my goals for two years.
4. What do I need to learn.
5. Where and how will I train.
6. Who are the competition
7. What is the market size
8. What is the market spend on similar products.
9. How long can I afford to live without income.
10. What legal form will my business take. What name.
11. Will I need to register for VAT
12. What records will I need to keep
13. How can I regularly assess my progress.
14. What is the most economic way of obtaining the accountancy help I need.
15. Have I got a �get out� plan. Has my business got a sales value.
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