The business world moves quickly, and if you have an amazing idea, creating your own startup could be the best way to realise the potential of that idea.
With over 12,000 new businesses being created every week in the UK, each of these businesses will have a different focus, a different size and potentially a different fate.
Whilst 12,000 new businesses were created, over 4,000 of them were dissolved, and with each of these failing businesses comes a story and a lesson to learn, one that experience and startup coaching can help to teach.
Here are some of the most common reasons startups fail and how to avoid the issue.
Great Ideas, No Practicality
Every startup begins with an idea, and in an ideal world, a startup’s success and failure would entirely depend on how good this idea is and the potential it has to solve a great problem in the world.
In practice, however, inspiration gets you one per cent of the way there. Ultimately you need to have a product to sell that people want and that is demonstrably better and more useful than what is currently available.
Expanding Too Quickly
Aggressive expansion can be an incredibly effective strategy to turn an innovative, flexible little company into an industry giant, but it needs to be carefully planned and sensibly realised.
Many companies, once they get some investment or positive revenues burn through cash very quickly to get to the finish line faster, and simply run out of money before they reach it.
When you decide to expand, do it at a rate that is manageable, subject to review and cost-effectively. It may be the case that you need a few pairs of extra hands rather than doubling your team.
The Business Strategy Is Flawed
Perspective is key when you are converting your startup idea into a business strategy that will create a powerhouse. Whilst there are so many elements to consider and often certain parts of a business plan will be fleshed out later, the more you fail to prepare, the more you prepare to fail.
When working on your business plan, ensure that you or the team around you has both innovation and practicality at the forefront. Make sure you have plans for the infrastructure you need and plan around the price and availability of the materials you need.