You may have made a New Year’s resolution to start your own business. That’s fantastic news if you have. Running your own business is exciting, gives you freedom to work on things you’re passionate about and with hard work you’ll probably earn more than what someone else is willing to pay you.
Taking that step to start your own business is also very brave. Many new businesses fail. But there are common reasons why they fail. Knowing what not to do is as important as knowing what to do. So examining and analysing others’ mistakes and failures can be very enlightening.
Here are just three mistakes that can lead to a business’s downfall:
Bad financial management:
You have to control the finances if your business is to succeed. If you don’t fully understand the basics of finance then learn about them before you start.
Poor business planning:
Some people are so enthusiastic about their business idea and are so convinced it can’t fail that they simply don’t do the necessary planning to make it succeed. No matter how your business is financed you need to write a business plan so you know exactly what you are going to do, how you are going to do it and when you expect to get into profit. Your business plan can then be used to raise finance and as a benchmark so you can judge how well your business is performing.
Poor management of staff:
Managing people is quite a skill and if done right your staff will be your greatest asset. Done wrong and your staff can be a drain on your resources and energy. So employing the right staff and keeping them motivated is a vital key to your success.
If that hasn’t given you enough food for thought then The Insolvency Helpline name the 65 most common reasons why new businesses fail and the Franchise Shop another 10.
So now you know what not to do you can go ahead with confidence and concentrate on what you should do. Good luck!
Finally, thanks to all of you who have sent in an entry for Student of the Year I’ll enjoy reading through all of them and announce the winners in a few weeks’ time.
