Each year over 660,000 new businesses are registered in the UK, which works out as over 70 an hour. Therefore, without a doubt, start-ups may face a lot of competition on their road to success.
A report by The Telegraph found that around one-fifth of new ventures will fail within their first 12 months, with that figure rising to 60% within the first three years. In fact, start-up failure is so common, that entrepreneurs often write a “failure post-mortem” to assess where they went wrong.
It’s important to be aware of the most common obstacles facing new businesses, so you can recognise weak points in your business model. This means you will then have time to make the necessary changes before your start-up becomes part of that growing 60 per cent.
It can be difficult to succeed as a start-up, so read on to discover our top tips for start-up success.
1. Cement Your Vision
In the initial stages of your start-up there will be many challenges, so it is necessary to have a clear vision of where your company is heading.
Laying out a mission statement isn’t just stating your vision, but also laying out the framework to achieve your goals, ensuring you can easily measure progress. Furthermore, a clear vision will act as the foundation for your entire business, allowing you to create a long-term strategy, engaging and uniting staff in what you are working towards.
2. Control Cash Flow
One of the main reasons start-ups fail is due to poor financial planning.
New businesses may often appear profitable on paper, but money owed is not the same as money in the bank, and the gap between providing services or products and receiving actual payment can leave companies in a difficult position.
Healthy cash flow and firm control of costs are vital for growing your business or securing further investment. Developing strict budgets and cash flow forecasts can help solve these issues, so you will be on top of your finances and can plan for both the short- and long-term.
3. Build & Market Your Brand
A strong brand identity is incredibly important. Many start-ups forget to focus on this aspect of their company when it should always be part of their policy. Your brand communicates what you value and can build trust and recognition, enabling you to effectively tap into your target clientele.
A strong brand identity will set you apart from the crowd, but this is useless without a solid marketing strategy in place to ensure people know about your business. Even if you have the best product and service on the market, without proper marketing it will be incredibly difficult to generate leads, acquire clients, and then convert them into sales.
Successful companies prioritise both brand identity and marketing. Although many start-ups will have a limited budget, cutting your marketing spend will always be a negative. Instead, look at reasonably priced ways to get your product and service out there, or outsource your marketing.
There are lots of opportunities for small companies to market themselves on a budget. However you may choose to market your company, make sure you have a strategy in place and regularly track your marketing activity to measure success, effectiveness, and ROI.
4. Hire the Right People
The right team can make or break a business in the early stages, so think about the kind of people you want working for your business. The hiring process can be long, so ensure you take a careful approach to your first hires, as in the long run, this will save both time and resources.
Hiring too many people too quickly can also create issues, particularly if you don’t have enough money to sustain payroll. Early on, it may be better to have a small, dedicated team who understand your business vision, so they can help build a positive working culture.
High rates of staff turnover can be avoided by establishing clear communication with your employees, so they know what is expected of them, whilst also developing a workplace culture, that makes them feel valued and appreciated.
5. Create a Scalable Business Model
Every entrepreneur wants to grow their business, however, growth that your business isn’t prepared for can actually be damaging, if there is no structure in place to support it. You may find your business is proving successful, but don’t jump headfirst into scaling without any strategy.
Whilst your business is still in its infancy, it is a great idea to create the structures needed to scale up the company. By implementing the right procedures and systems in the early stages, you won’t have to catch up later on as your company grows, and without negatively impacting customer service and product delivery.
6. Never Give Up
Although building a new business can be difficult, resilience and readiness to change tact when things aren’t working are hallmarks of a good entrepreneur. So, never give up!
So, there you have it! Here are our top tips to overcome obstacles to start-up success. We wish you every success with your start-up and hope this guide proves useful.
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