Remarkably, 660,000 new companies are registered in the UK every year. That’s equal to 70 new businesses being formed every hour. That’s the same as every man, woman and child in Glasgow starting a new business every year!

What is less talked-about is the fact that 20% of small businesses fail in their first year, 30% of small businesses fail in their second year, and 50% of small businesses fail after five years in business. Finally 70% of small business owners fail in their 10th year in business. 

Let’s be clear, businesses fail for many reasons. Some of those reasons are listed below:

·         Lack of planning

·         Leadership failure

·         No differentiation

·         Ignoring customer needs

·         Inability to learn from failure

·         Poor management

·         Lack of Capital

·         Premature scaling

·         Poor financial management

·         Lack of focus

·         Personal use of business funds

·         Over expansion

 Give your business the best start in life:

·         Set Clear Goals

Does your business have a clear mission, yearly goals and a long-term gameplan? Having a business plan in place will help you to focus on these.

Ensure your goals are specific, measurable, achievable, results-focused and time-bound.

·         Remember Cash is King

It’s worth remembering the old business saying “turnover is vanity, profit is sanity but cash is reality”. A shortage of cash is generally what sinks small businesses so learning to monitor your cashflow is critical. It’s important to forecast your cash outflows and cash inflows for the next 12 months to ensure that you will have sufficient cash to run your business.

·         Choose Your partner Carefully

Picking the right person to help you turn your business from an idea into a success is as important as choosing a life partner. It’s all too easy to go into business with someone you know well – you get together, think of an idea and decide to get started – but it can so easily end in tears. Don’t forget that if the business does not work as planned, you are putting your personal relationship with that person at risk. So before you get started, think carefully about the good, the bad and the ugly of being in business with a particular family member or friend.

·         Know Your Market

Knowing your market and accurately assessing the potential demand for a product or service is the key to an idea becoming a success or a failure.

·         Get Professional Advice When You Need It

In a company’s infancy, it is all too easy to skimp on professional fees by dealing with issues that you shouldn’t be doing yourself. It’s better to spend your time focusing on running and growing your business rather than re-inventing yourself as an accountant, lawyer or another professional adviser.

 The key is knowing when to call upon the professional adviser, and most will tell you when you are asking them to do something they will add no real value to or you would be better off dealing with yourself.

 There is a lot to think about when starting your own business but avoiding these common pitfalls will give your business a good chance of success. It can be highly rewarding while giving you the autonomy you would not get working in someone else’s business.

 We have built up good working relationships with many clients, several we have had for many years, become one of them and don’t become one of the “BUST” group.