​​​​George Marcou

Over half of new businesses fail within their first 2 years mostly because they are unprepared for the reality of running a business.  Many of the additional skills needed to run the business effectively will be brand new to the business owner.
 
The problems that lie at the cause of most business failures fall within these common situations.
 

1. Business plans are rarely adequately detailed or logical. 

There is hardly ever a real plan for execution.
They then fail to test their business plan to destruction to see if it really works in theory prior to launch. 

Is there a logical and irrefutable progression to the steps in the plan, or is the plan full of assumptions?
Listen to everyone that tells that that it will never work and ask one simple question.  Why do they think that?  Learn from their answer and adjust the plan if necessary.
Ask as many sane people as possible, especially those who run their own businesses.
 
If a business fails to plan, how could anyone expect the execution to be a success?
 

2.  Lack Of Resource Management

Business owners don't take time to amass the right resources and team members before the launch their business.  It's like trying to build a house on your own, without bricks.
Figure out everything that you’re going to need and get it together before you launch.
Get everyone that you need on board, including external advisors and service providers.  Listen to them and what they think of your business idea.
 

3. Lack of Financial Management

Very few businesses want to deal with their accounts and their figures.  Consequently they fail due to lack of financial insight and control.
A new business needs to be in control of its finances and aware of all of its figures.
Most businesses only think of the accounts when they receive letters from HMRC telling them that they need to file a return.  It is too late to fix anything at this point.

Management and control need to be a daily habit otherwise the is a lack of management and no control.

Every issue comes as a surprise, often an unwelcome surprise.
Businesses that have no control also end up spending money that should go to the tax man. 
I will say this only once.  Find an excellent accountant that really understands business and making money.  Hire them as early as possible to advise and prepare you.
 

4. Ineffective Marketing

Small businesses (unless they are marketing companies) don't make it their business to understand marketing and either don't employ sufficient marketing or throw their money away on ineffective marketing.
Every business needs to make sure that it has the ability to reach its customers.
Most are clueless that they can do a lot for free.
 

5. Insufficient Income

Every business needs to sell in order to have an income, but most new business owners are reluctant to actively sell their products or services.  They suffer from a type of shyness that ensures that they don’t make enough money to survive.

New customers, new contracts and new sales are the way to build a business.

 

 
6. Failure To Adapt

New businesses fail to adjust their plans to fit with the reality.  This is also one of the main reasons that established businesses get into difficulties.
A lack of detailed reporting and analysis often means that small businesses don’t have a complete picture of exactly what is going wrong or what they should do to fix it.
This lack of flexibility can easily break a business.
 
 
Each of these areas contain a multitude of problems and ‘ticking time bombs’ that new businesses simply are not prepared for when they start.
The damage caused when these explode can easily sink a business that is struggling to establish itself.
It’s small wonder that the rates of failure are so high. 
 
It’s a shame, as each of these issues is entirely avoidable.