Starting your own business certainly seems like a glamorous idea to begin with but making it a reality is much more difficult than conjuring up dreams of success and money in your head.
Here are some hard truths: Around 50% of businesses tend to fail within the first five years, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months and ultimately, a whopping 80% crash and burn.
Business failure is a reality that is hard to digest. Despite the fact that 80% of businesses move ahead of the first-year mark, the rates begin to decline considerably from then on.
So, what about the fifth year? Well, only half of them survive! If you’re wondering how things are looking for businesses after ten years in the game, you may be shocked to hear that only 30% of businesses are still up and running.
Nonetheless, wide-eyed millennials do not want to believe that and often refuse to put themselves in the same category. Ignoring the facts may end up being a huge mistake, so equipping yourself with all the knowledge you need to avoid failure will make it more likely that your business will succeed, after all.
At Northants Accounting, we wanted to shed some light on why businesses don’t come out on top. So, instead of brooding theoretically over why so many businesses fail, let’s go through the major reasons why and how to avoid them.
Not Delivering Real Value
Delivering real value is at the heart of every successful business. It’s simple – even the world’s most flourishing businesses abide to this one important rule. Delivering exactly what you promise is a necessity but going above and beyond will mean that your brand soon becomes well-loved and hard to live without.
Irrespective of the situation, whether you’re on a quest to get rich fast or whether you’re wanting to do something every day that you really love, the only way you are ever going to succeed as a business is by delivering real value – and more importantly, doing so consistently.
If you’re not including as much worth as your competitors, you’ll find that you’re losing a lot of potential customers in the process.
Now you might ask: “Why add so much value?”
Well, it’s quite simple – to create buzz about your brand but of course, to retain customers too.
Picture this – you receive service from a business which blows your mind. You’re so impressed, you decide to share your great experience with your friends and family. Better yet, you post about it on social media. You’re happy, your friends and family get a personal recommendation and of course, the business gets a fantastic review. Everyone wins!
Being Unable to Compete with Market Leaders
It is extremely difficult to stay afloat when your competitors are fierce and better at delivering a great service. This is particularly true when it comes to money-spinning markets, as the stakes are really high.
Being a small business, it’s crucial that you find a way to fight your bigger counterparts. Having a fantastic unique selling point (USP) will set you aside from the competition and could be the reason why your business is thriving when all the others in your industry are closing their doors for the last time.
Lacking the Ability to Control Expenses
It’s easy to overspend when it comes to running a business, which is why you must be strict with yourself and also the people who have access to the funds in your business.
Being able to sensibly manage your business’s expenditure is of paramount importance and many successful business owners possess great spending habits.
When the everyday expenditure of a business spirals out of control or the owner uses up most of the funds for frivolous, personal reasons, it becomes practically impossible for the company to stay afloat!
If you struggle to keep your finances in check, it is definitely worth speaking with a small business accountant. There are many ways an accountant can help you and your small business.
Get in touch with Northants Accounting today as we understand the challenges many SME owners face from day to day and we can help you sail through rough waters as and when you experience them.