The figures relating to startup failures are enough to send a shiver down any executive’s spine. 50% of startups fail entirely in their first year of operations, and the top reasons for failure don’t exactly make for pleasant reading. Incompetence, lack of managerial experience and neglect are named as the top three factors in startup failure, in a report by StatisticBrain that is sure to put off many would-be entrepreneurs from starting their first business venture.
Luckily, there are ways in which startups can help to secure their future and make it past the one-year milestone which has become so important. Take a look at our three top tips to avoid capitulation before the first anniversary of a business.
1. Planning and Strategy | One of the main factors under the ‘incompetence’ section of the report is lack of planning. It is crucial for a business to have a foolproof business plan and strategy that will take them past their first year. Many entrepreneurs get so carried away with their business idea and envision it being such a success that they feel making these plans might be a waste of time. After all, who needs a plan when the product or service is this good? The answer is that every business needs a plan, and without one, startups are resigning themselves to be added to the growing number of businesses that fail within the first twelve months.
2. Coaching and Mentoring | Don’t be too proud to take on advice from those who know better. Business coaches and mentors have a lot of experience in launching startups and seeing them past the magic one-year mark, and they can help to stamp out a lot of the factors for business failure. Mentors and coaches won’t allow business owners to expand beyond their means, they won’t encourage them to indulge in inadequate borrowing practice and they will urge all of their clients to always have one eye on the accounts, as well as providing the integral support that business owners need to make their startup a success.
3. Goals and Targets | If you don’t have any goals or targets, how will you know what you’re aiming for? If a business doesn’t set itself an aim, how will the owner be able to establish whether it is successful or not? It is very important for startups to set themselves aims and goals, and then work towards achieving these aims. Whether they want to turn over a certain amount within the first year, whether they want to sell a certain number of products or whether their target is to take on five new staff members to deal with expansion, it is vital to have a target system in place. If you don’t know what you’re aiming for, you can’t know where you’re going.