According to enterprise research’s statistics, 54.7% of start-up businesses do not survive into their third year. This shouldn’t deter you from starting up your own business – or growing your current business – it just means that there are a number of points to consider.
1. Lack of strategic planning
Before even attempting to set up your business, you must first implement a plausible business plan that outlines your initial aims and objectives.
You should then decide on how you intend to achieve these goals. Conducting market research will help you to decide on your Unique Selling Point (USP) – this will distinguish your business from competitors and ensure a sense of exclusivity.
Your business plan should also include a budgeting plan in order to establish investment conditions, such as affordability of stock, employment, work base and more.
Ideally, you should also include problem-solving analysis by considering potential issues and solutions – this will prepare you for any problems in the future.
2. Insufficient capital
One of the most common mistakes many small businesses make is that they begin operating with insufficient capital. This normally means incoming funds are used to pay off obligatory bills, rather than gaining profit, which can result in business failure.
To avoid this, it is essential to have your finances in order before embarking on your business venture. This means you must establish all your business costs and ensure that you have sufficient funds.
This may result in you having to take out a business loan in order to operate effectively, although you should make sure that you have a repayment plan in place before taking it out.
3. Understanding Competition
At the beginning of 2018, the Federation of Small Businesses (FSB) recorded 5.6 million small businesses operating in the UK, which means most start-up companies will face plenty of competition. As the number of organisations grows, so does the competition, which is why it is vital that you should never underestimate your competitors – especially in the initial start-up period.
During your initial planning stages, you should have already established who your competition is and you can monitor their activity in order to stay one step ahead. You should always ensure that you are doing everything you can for your customers, so they have no reason to turn to your competitors.
4. Consumer Interest
Customers are arguably the most vital element of your business. Before you even start, you must establish whether there is consumer demand for your product or service. Without consumer interest, there is no business.
If your business does generate significant consumer interest then that’s great, just make sure you are constantly catering to your customers’ needs – as the saying goes ‘the customer is always right’.If you fail to listen to your customers, you will not only face financial consequences, but the reputation of your business could also suffer.
Consider implementing some sort of customer feedback form on your website, social media, or even something as a simple as a suggestions box in your workplace. This demonstrates to your customers that they are a top priority.
5. Wrong Working Location
Location is one of the most important aspects to consider when choosing a base for your business. Whether you choose to work from a private office, a co-working space, or even from home – you must choose the right space for your business.
At Signature Works, we believe your working space is fundamental to the success of your business, which is why we offer a variety of office space services. We have an array of clients who have begun their successful start-up businesses by hot desking or working in our Liverpool-based co-working space, serviced offices or even our virtual office for those who wish to start their business from home.
Contact Signature Works
Here at Signature Works, we offer diverse working spaces that step away from the traditional office setup. We provide exciting spaces to freelancers, start-ups and SMEs who are looking to grow in a creative and innovative environment.
If you are searching for a location where your small business can thrive, contact our experts today on 0151 558 1566 or by email.