Have you started a company? Or you are pondering how long your company will survive. Maybe the first few days of opening was bad or the first few weeks weren’t promising a bright future. Probably you already lost the enthusiasm that lead to the startup and you’re concerned the establishment won’t linger for long before it becomes history. Not only has recent studies proven that 90% of newly established companies fail in five years and of those that strive to survive the first five years of establishment, nine out of ten will fail as well.
The motive behind this article is not to create panic and hold you back from starting the company you have always dreamed of. There are certain factors that help predict and create the success of new start up and as well mistakes that rich entrepreneur keep making; awareness and understanding these two sides of a coin is paramount in creating a well-grounded business that will stand the test of time.
Not all startup face the same challenges, this is because of the difference in the industry they belong, the geographical location, targeted audience, the entrepreneur and relevance of the business. A substantial number of business owners are whose startup failed are likely to attribute their folding up to running out of money. Some attribute to working with the wrong people, in partnership or part of workforce. A few admit to lack of proper research. While a good sum of people can’t attest to the reason why their business died. How then did the big co-operation get to where they are?
What are the mistakes of new entrepreneur wishing to make their dream come true?
Lack of proper research: This is the first point I would like to point out. Many entrepreneurs have a burning passion to succeed, they design a mental outline of what they want whereby all the factors affecting success is favorably controlled. However the real life factors affecting success are not under anyone’s enchantment. Proper research has to be made, time has to take its course. Research should not just be doe online because the media can be deceiving, people should be interviewed, this include potential customers and people in similar business. Attorneys should be questioned to know the local law affecting the industry. Sources of local material, getting good workforce, strategic location base the company. Amount required to startup and the amount needed to keep it running till substantial revenue can be constantly flowing from the business; how long the business would need external funding and equipment and fancy procedures that are not necessary or required are the stuff worthy of taking time to research about. A proper and unbiased research will go a long way in helping predicting and building a business that will stand the test of time.
Wrong Market: This is a result of incomplete research by an impatient enthusiast not willing to his homework. Paramount things in a business is the product and the buyer; a businessman definitely recognizes his product, but not all businessmen know their targeted audience; the person to whom they want to sell their product, hence are not equipped enough to target their market. Not everyone will be a potential market of your good (except you deal with oxygen and water), hence recognizing and targeting your market will help you a step further.
Lack of expertise in the industry: Real estates is one of the ‘quick rich scheme’ and everybody wants to get into it. This is because many prominent people have attributed their wealth to dealing in the affluent field. These are success stories but what many fail to recognize is that there are more failure real estate stories than the counterpart admired success stories. An entrepreneur whose family is long involved in a business is more likely to succeed in an industry than a newcomer because of the experience and network that has been built. One doesn’t need to come from a family of farmers to be successful in a large farm (mind you, farming is the next big thing after crypto and technology in Africa and Asia), all he needs is to have knowledge and good networks in the industry. You could partner or employ the expertise of an experienced farmer (or whatever industry you want to venture into). Youtube videos aren’t enough to turn you into an expert overnight, you need the expertise of people.
Wrong Association: This include the people we partner with and the people we employ. Most times, we need to partner with others but what if a partner id dormant or work less or you have conflicting methodology of running the business? Or settling for workers who are not trained or experienced in the industry, these are wrong association that will eventually lead to the death of a business. One should be very discrete when choosing people to work with especially in business; my last post on reasons you should refrain from employing family and friends expatiate on a dimension of this crucial point.
Losing sight of constantly evolving trends: This is my last point, it can be overlooked because it worked in the past, the believe is that it will one more time.
Well, no one is interested in old-fashioned typewriters. The problem with Nokia started when it refuse to rebrand and strip itself of its old glory and allegiance; it refused to recognize that androids is the new thing. Some go as far as failing to recognize that the market has no need of their product. The printing industry is dying, it’s reincarnating into the digital world. It would be crazy still trying to build a multimillion dollar printing press; I attribute this failure to recognize the obsoleteness of a business to the first point listed above on why new startup fail – lack of proper research.
Making proper research will help one set realistic goals. You would what to and not to expect. There will definitely be up and downs but determination and perseverance will definitely come in handy. Thanks for reading through my article. Don’t forget to follow me!
References:
- 2019 Small Business Failure Rate
- Success and Risk Factors in the Pre-startup Phase
- How Many Startup Fail and Why?
- Who killed Nokia