| It is estimated that something like 20% of new | | | | yours and see if they are succeeding or failing. If they |
| businesses fail within a year of starting up, and 50% | | | | are profitable take a look at why, and find out whom |
| within the first three years. These are grim numbers, | | | | they are selling their products or services to. One of |
| especially for anyone who is considering starting up | | | | the most common mistakes made by new businesses |
| their own business. Fortunately, there is an upside, | | | | is that of over estimating the market impact that they |
| looking at those figures in a slightly different way, 80% | | | | will have. Setting up in a larger than necessary office |
| of all new business survive their first year and 50% | | | | or shop; hiring too many people and purchasing |
| make it to at least three years. | | | | unnecessary and expensive equipment based on cash |
| What anyone looking to start their own company | | | | flow projections that have more to do with hope than |
| needs to do is to analyse what the businesses that | | | | reality, are the quickest ways imaginable to send a |
| succeeded did, that the ones that failed didn't. There | | | | new business to the wall. |
| are in fact a number of common mistakes that failed | | | | The importance of accurate market research and |
| businesses have made and knowing what they are will | | | | enforcing a strict cost control regime cannot be |
| give newcomers the necessary knowledge to help | | | | overstated. Never be afraid to seek professional, |
| them avoid falling into the same trap. | | | | expert advice on financial issues, preferably from an |
| Business failures are often blamed on insufficient start | | | | experienced business accountant or financial adviser. |
| up capital or not hiring the right people. The truth | | | | Make sure you have enough money to get your |
| however, is that the failure of many new businesses | | | | business idea up and running and have contingency |
| comes down to something far closer to home, a | | | | plans in place should it fail to take off in a short period |
| failure to thoroughly research the potential viability of | | | | of time. Also be aware that situations can arise that |
| the business in the first place. Believing you have a | | | | are entirely beyond your control, such as interest rate |
| great idea and throwing money into getting it up and | | | | rises, for example. Having healthy cash reserves to |
| running, without first having undertaken proper market | | | | get you through an unforeseen crisis is an absolute |
| research is the number one killer for the majority of | | | | requirement in this day and age. |
| new businesses. Fortunately there are ways to avoid | | | | A professional business plan is an essential tool for |
| this by carrying out relatively simple surveys yourself, | | | | starting up a new business successfully and it is highly |
| without breaking the bank on expensive market | | | | advisable to draw one up, or have one drawn up for |
| research organisations before you have even begun. | | | | you, before you embark on your new business |
| Test out the viability of your business by asking the | | | | venture. |
| opinion and advice of your own network of contacts. | | | | If you can avoid these common mistakes, your |
| Take a look at government data on such things; it is | | | | business will have a much greater chance of |
| almost always available completely free of charge. | | | | becoming the profitable success you obviously expect |
| Take a look at businesses operating in areas similar to | | | | it to be. |