Last October Forbes reported a failure rate of 90% for business startups. Why are they failing and what processes can small business put in place to help shield themselves from similar disaster?
In this article let’s outline three areas where business can implement processes and plans that help avoid startup failure.
The report from Forbes is a harsh reality that the majority of owners of startup businesses failed to consider even before they start the business venture. However, even if it is the real scenario in the business world, this report doesn’t aim to discourage entrepreneurs from starting up.
The report aims to encourage the entrepreneurs and owners of startup businesses to work smarter and harder to combat the possibility of failing.
If you’re an entrepreneur and you don’t want to be part of the nine out of ten businesses that fails, here are the things that you can do to avoid the verge of failing.
Market Research: Is there a Demand?
When it comes to developing the business plan, many entrepreneurs failed to determine whether there is a market for the products and services that they want to offer.
As a matter of fact, CB Insights showed an enlightening chart which shows the top 20 reasons why business startups fail. The chart revealed that out of 20 reasons, the first is that the market doesn’t need the products or services.
“Often, a new enterprise will be so enthusiastic about their new product or service that they assume the market will respond with equal enthusiasm”,says Adam McDean, CEO of BusinessBasics Australia.That needs to be tested in the real world. A startup needs to include objective processes for each phase of its business that test and measure market demand.”
Therefore, making a business plan must start with the process of determining whether there is a market for the specific products and services or not. Remember that a business should aim to provide the products and services needed by the prospect consumer.
Good Resource Management: Do you have what you need?
Once a solid and doable business plan is laid out, the next phase is to gather all the necessary supplies that are needed to make the plan work accordingly.
In this phase, entrepreneurs tend to overlook the smallest details that are as important as the main points in the plan. As a result, the business plan isn’t followed properly which results in the failure of the business as a whole.
To aid with this, gather all the stuff that you’ll need to support the plan and the business itself. In addition, it is also important to have a backup plan just in case the supplier of the particular item is not capable of providing the quality and quantity that your business needs.
Quality Processes: Are your procedures are clear and concise?
To ensure that the plan will work for the business, in the long run, the details and data must be clear and concise.
Throughout the process of working for the business, make sure that the plans that are being used match the needs of the business and the customers.
If the original plan isn’t applicable in a certain time, have a plan that is versatile enough to match the circumstances.
Starting a business can be an adventure with lots of potential risks. But, it is all worth it once you start to see the fruit of all the sacrifices and hard work.