My name is Jax and I am the founder of Sun Creative, a Brand and Marketing Strategy Consultancy. I love sport, food, travelling and spending time outdoors.
I have been involved in varying aspects of business and marketing for the last 22 years, working for global brands such as Adidas and Oakley. Whilst the vibe of the marketing industry and the long hours were appealing in my younger days, I felt that I was destined to do more with my life.
Successful Start-Up Businesses need to Avoid these Mistakes
With 2020 being the year of change, 5 230 000 new businesses were registered in The United States, United Kingdom, South Africa and Australia alone.
The scary statistic is that 90% of these are not going to be operating in 3 years’ time, with a further 6% not making it to 10 years. That leaves 4%, who will have a Successful Start-Up Business! A start-up business takes innovation, time, total dedication and 100% commitment to getting you recognised and established. If you really want it, you have to be in for the long haul.
If you are a business owner who has established themselves over the years, congratulations, you are one of a very few who are getting it right.
There are many reasons why start-up businesses go wrong. We have highlighted 6 of the main issues, although there are many more.
Poor Financial Management – the total in your bank account at the end of the month, or total sales made, does NOT reflect how your business is doing.
I remember sitting in a training session a few years ago with business owners. We were asked to work out our Return on Investments, our Profits/ Losses and our Gross Profits. 90% of the people sitting in that room, had no idea – I was pretty blown away. How are they running their businesses?
If you own a small business, be fair to yourself and spend some money hiring someone with a Financial Degree to properly manage your cash flow.
Too much initial debt – so many start-up businesses want to be successful industry giants within their first month of trading. They employ a large staff complement, rent a beautiful office space and buy the high-end office supplies and furniture before their first client has been acquired or the first sale has even been made. They completely over-extend themselves.
If a loan is required, ensure that it is good debt and only take what is needed. Too many entrepreneurs or start-up business owners then utilise their loans to generate business income. This is a definite NO!
Build your business one level at a time – not ten all at once.
Start small and build as your revenue increases – as the saying goes, “Rome wasn’t built in a day”.
No business plan – before a business can begin, a complete plan and strategy needs to be in place. Short-term and long-term plans and goals need to be assessed along with attainable Key Performance Indicators (KPI’s). We use 12 steps which we do thorough assessments on. These need to be kept on file and bi-annual analyses need to be performed.
There are many businesses that can assist you with your business plan, so you are not expected to do this on your own.
I have given you my 12-step checklist.
Focus only on “whale” clients – Whilst we all yearn for that million-dollar client, these are few and far between. They also take time to “win over”. These large clients need to have total trust in your business and will want assurance that you are going to make a difference to their business.
Many businesses focus entirely on their large customers forgetting about the “bread and butter” clients. The smaller and more often, loyal customers, are the ones that keep the engine going.
Whilst sales specialists will always tell you to focus on your top 10% clients, I still believe showing the next 40% a little time and effort. This will keep them true to your business and satisfied with the service.
Don’t depend on your big customers.
Inability to adapt – If 2020 taught us anything, it was that businesses needed to adapt and pivot, quickly. Your business needs to be able to change strategies fast and effectively. Economic factors can change in an instant and you need to be able to react, correctly.
Keeping up with new technology developments is a job within itself; you need to keep in the pack, if not ahead of it.
With so many new businesses being created, there is increased competition in all fields of business. This is causing customer preferences to change. Start-Up Businesses need to create value to attract and keep your clients.
I have always been a keen advocator of continuous learning. Currently, this has never been more relevant. Your business model needs to include continuous education.
Unfortunately, with many “old-school” business owners, who still like to run things as they did 30 years ago, this will only lead to disaster. This brings me to my final error.
Poor Leadership – Not everyone is an effective CEO. Without a strong management team, your ship will sink. Sadly, so many people think they are born leaders when they couldn’t be further from the truth. Alternatively, you have the CEO who knows that they are ineffective but don’t want to admit it.
An effective leader needs to make decisions quickly and correctly, taking all aspects of their staff and business into account. They need to re-assess their business model often and keep up with both the current trends and the customers’ requirements
A true leader will know when to ask for assistance – before it’s too late.
Don’t forget to receive your Start-Up Business Plan Checklist.