Why some start-ups fail and other succeed

Steve Boyes, SME Partner at Beever and Struthers discusses the fine line between success and failure when starting your own business.

Most successful entrepreneurs develop a business plan to not only cover financial strategy but also the route to market for products and services. Identify the unique selling points of your products and ensure that quality and price meet market demands and expectations. A business should undertake market research before it launches products to establish if demand exists and the venture is viable.

The temptation is to accentuate the positive and downplay the negative, but the result is that not enough cash is introduced or borrowed at the start, leading to working capital problems. The cashflow cycle is vital at the early stages of a business’s life – poor collection of revenues may cause failure, even though sales and profits are achieved. Initial enthusiasm often disappears after a successful start because many entrepreneurs feel they have achieved their objectives. Owners fail to keep fingers on the pulse of the business and its marketplace and fail to adapt to changes in market conditions, prices or competition. There is plenty of advice available to entrepreneurs and successful ones will utilise that expertise to improve the status and profitability of their business.