Top Ten Business Startup Mistakes

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Most business startups fail!

Did you know that...

40% of new businesses will fail in the first year!
Within 3 years, 56% will have failed
Within 5 years, 76% will have failed

Of those who go past 5 years, there's no guarantee they will survive the next 5 years. So here I've listed the top ten mistakes we see made by startup and small...

Lack of funding. Even profitable businesses go bust. Startup and growing businesses are especially in danger of over-trading. Cash-flow forecasts shouldn't just be seen as something needed for the bank manager. They are crucial to the proper management of any business.
Trying to be the next Richard Branson. Great entrepreneurs with new ideas that create a totally new market are few and far between. The right ones can be a fantastic success but most of these will fail. You know the ones - the type you generally see on Dragon's Den. It's far easier to take a proven business type and completely out market the competition than it is to develop a totally new product.
Over-spending on marketing that doesn't work. If advertising doesn't work first time, stop it - ignore what the sales reps tell you about having to advertise for so many weeks to increase your response. Test small and measure all of your marketing activities and invest more in those that work.
Underestimating the time commitment and timescale to succeed. Very few businesses are a success from day 1. It takes a lot of dedication and commitment. Being the boss isn't about the holidays, especially in the early years. Building a successful business takes time as well as money.
Reliance on one product or service. Most of your work will go into developing relationships with your customers. It's far cheaper to sell to an existing customer than to gain new customers. They already trust and like you or they wouldn't be doing business with you. So think of what other products or services you can provide to them or who else does that would be ideal for your customers and form a host-beneficiary relationship with them. Often you breakeven on your first product sale, but all your profit comes from your backend of products.
Lack of systems. Many small business owners burn out because they can't delegate responsibility, thinking others won't do the job as well as them. Truth is, they probably never will but unless you delegate you can never grow. To do this you need systems - you need to work ON the business and not IN the business. If you haven't already done so, read the E-Myth by Michael Gerber. If you'd like to borrow a copy from our business books library please give me a call.
No goals. Research has regularly proven that people with specific, measurable, achievable, relevant and time framed goals do better. They should be written down, reviewed regularly and everything you do aimed at getting to them.
Complete lack of marketing systems. You need systems to generate leads, to convert leads and to re-sell to existing customers. You also need multiple forms of all these. If you rely on Yellow Pages and one year they print your phone number wrong, you need to know you've got plenty of other marketing going on.
Having a great website that nobody visits. Your website is no use if you don't invest in the activities necessary to drive traffic to the site. That could be online marketing such as search engines, pay per click, email marketing, link campaigns, viral marketing, etc but also traditional offline marketing activities.
Choosing the wrong accountant. Of course I couldn't leave this one off the list. The wrong accountant can cost you dearly and leave you in a terrible mess. If you get your tax and business planning right from day one it's so much easier. The right accountant can point you in the right direction for all your business startup needs, often way beyond just the normal accountancy and tax affairs.

To discuss this or for any of your accountancy and tax needs, please give me a call. I'm very happy to visit you without charge for a consultation to discuss how we could help you further.