If you’re considering starting a business this year, I have a worrying statistic you need to take on board. An estimated ninety-seven percent of new startups fail. If that percentage seems a little high, you’re right. It probably is so let’s take out ten percent of people who had no idea what they were doing. We’ll take out another five for the people who thought they could begin without any money in the bank. Then let’s take another five for those who simply weren’t selling a product with demand. Where does that leave us? If my maths is correct, you’ve got just under a twenty-five percent chance that your startup succeeds. The odds aren’t exactly in your favour and remember, that’s assuming you had a great idea and knew how to market it.
I guess the question we’re really asking here is why do startups fail. Outside the obvious reasons, I think the main cause is probably high costs. If you think you can start a business without any money in the bank, you’re wrong. Even setting up a blog costs money eventually. You have to host your site to make sure that it doesn’t crash, and that’s an expense. So, let’s get away from this idea that you can start a company for free. You can’t. What we need to think about is how to keep costs low enough that they are manageable.
A Small Staff You Can Trust
I suggest you hire the smallest number of people that you can manage. The more streamlined that your business is, the better. Another employee is just another wage that you have to fit into your budget. I would even suggest you look into being a solopreneur. That way, you don’t have any employees that need to be paid at the end of the month. You can survive like this by relying on business outsourcing services that you can trust. You should only build up your staff when you know, you’ve found a successful business venture.
A Small Office Space
Don’t make the mistake of renting a big office and then proceeding to fill it with people. Particularly, if your business idea can be run quite comfortably from anywhere. If your clients aren’t local, there’s no reason to set up your office in the middle of town. There’s also no need to use a private building. Instead, you can investigate services on a website such as www.hoxtonmix.com. Here you’ll find lots of options that are great alternatives to renting or purchasing a full business office.
Hire An Accountant
This happens to virtually every business you can think of. The owner doesn’t keep track of the money that they’re spending or making. Due to this, any revenue is cancelled out by the massive business costs that they’re not watching. To avoid this, hire an accountant as soon as you start to make or spend substantial amounts of money. That way, you won’t fall into the trap of spending more than you can afford. You can have a look at great online accounting services on a site such as www.cleveraccounts.com.
Follow my advice and you’ll avoid the main cause of the failed startup.