9 out of 10 start-ups fail in their first year.
Do you have what it takes to be part of the 10% who succeed?
Here are 5 obstacles every start-up must overcome if it’s going to be successful. Here’s your chance to determine your weaknesses and build on your strengths.
1. Not Embracing and Leading Through Chaos
For a start-up business to be strong enough to beat the odds and succeed, it must have determined leaders that are willing to work hard and see through the tough times. Strong leaders, however, must not be confused with dictatorial bosses.
Strong leaders are the decision makers, idea generators and team builders for their company. A leader of a young company plays a crucial role in these areas.
Leadership, however, isn’t an innate skill; it’s something that you can learn and improve. Become a strong and successful leader, and your business will soon follow!
2. Not Standing out From the Crowd
No matter what industry you go into, a start-up business is in a contest against all its competitors for survival. With 9 out of 10 start-up businesses failing, tough competition is either going to push you and your company forward, or it is going to eat you up. If you want to survive and want your business to thrive, it is essential you learn how to deal with direct and indirect competition. Keep in mind that no matter what type of business you have, you should focus on making yours a prosperous niche.
3. Not Having Sustainable Expectations
It may be tempting to assume your business will exceed your expectations and will make a neat profit, but the reality is many businesses need more than a year to reach profitability. One of the best ways to last beyond the first-year mark is to recognize and plan for the fact that it may realistically take 18-24 months for your business to get off the ground.
Even when things seem to be functioning flawlessly, it’s important to keep a good balance of having a “builder” and a “protector” mentality. If you are only building (i.e. builder mentality) at the expense of protecting what you have already had, you are setting yourself up for failure. Conversely, if you are holding back on building your business and over-protecting (i.e. protector mentality) what could actually be used to leverage your business’ growth, this could also lead to failure. Ensuring a good balance here will only lead you to success.
4. Not Managing Cash Flow
There is one overwhelming factor as to why so many new businesses fail: cash flow. A business owner’s profit and loss statement or balance sheet may show the business being profitable, but have limited or no cash in the bank. Don’t get caught by this delusion of “money success”. You must be money smart if you want your business to grow successfully. Avoid being part of the 82% of new businesses failing because of poor cash flow management. Make sure you use the right tools to keep track of the cash you generate in the business.
5. Not Effectively Managing Tasks That Matter
The term “time management” has its merits, but when thinking about it, the emphasis, in my opinion, should be “task management”. There is an abundance of important tasks and decisions to deal with when starting up and building a new business. The reality is we only have 1,440 minutes in a day and have no benefit of carrying any of these minutes over to the next day. As much as we all must get accomplished each day, if everything is important, nothing is important. Continuing down this path always leaves us running on our hamster wheel which does not necessarily mean we are productive.
Having the ability to say “no” is an invaluable skill that everyone should learn in business. When you can confidently walk away from opportunities that don’t generate value, you will find more time to be able to say “yes” to the things that do matter. Learning to properly manage your crucial tasks using the time allotted to you will mean you are staying on task and getting the right work done. Use your resources efficiently, and your business will benefit.
These are just 5 hurdles that you are bound to come across when starting up a new business. Mindful money management, strong leadership skills and efficiently using your time should all be priorities for a new business owner. With these 5 tips in mind, your company will not become yet another failed business statistic- you will grow towards a successful future.
What obstacles have you overcome in your business?