It is estimated that roughly 90% of startups fail and that 10% of these fail within the first year. While these statistics may seem like a deterrent to venturing out into the startup space, the cause of failure is often a simple lack of forethought and planning, easily addressed and corrected with the implementation of a few key strategies.
The 3 common reasons startup businesses fail are:
Cashflow issues: not managing your revenue and expenditure correctly, not managing your bookkeeping and accounting correctly and attempting a DIY approach to your business’s finances often lead to disaster.
Outsourcing your accounting to a trained and experienced professional will ensure your business practices are set up correctly, right from the start. Additionally, implementing software solutions that help monitor, report and control spending will help curtail unnecessary expenditure and identify areas for improvement.
Not hiring the right people: people are what make an organisation. A mismatch in technical skills and soft skills that prevent team members from carrying out a specific job role effectively, can prove fatal to a business. This phenomenon is explained well in the book Good to Great by Jim Collins.
Hiring the right fit for your business goes beyond posting a job. It is selecting the right candidate from an overwhelming pool of applicants and managing the entire process through to orientation. For businesses without a trained and experienced member to manage this process, the best resource would be an outsourced professional that can objectively help choose the right person for the right role.
Neglecting the core of the business: attempting to manage support functions like accounting, payroll, HR, and digital marketing without the expertise to manage these specific roles can be time consuming and costly. The specific knowledge required for these roles is far more effectively handled via outsourcing, saving entrepreneurs and founders the time and money to focus on the core of the business.
Nobody knows your business better than you do. It is far more effective to focus your time and attention where it can make the most impact.
Often the trajectory from start to success is anything but smooth. Bringing in experts to help mitigate risk and address critical components of this process offers a variety of benefits that can help businesses thrive.
For more information on how we can add value to your business, get in touch with us on 1300 707 260 or firstname.lastname@example.org.