How to avoid business failure
The statistics for small business failure make for grim reading. It’s a fact that fewer than four in ten businesses survive past the first critical three years of trading to become sustainable. That’s a lot of time, money and ruined dreams that could so easily have been avoided.
I’ve worked with many businesses here at the Business & IP Centre from early stage to high growth and have found that there are some key things to do at the early stage that will significantly reduce the odds of failure and even grow to real success. In fact our research has shown that using our resources and networks will reduce the chance of business failure to less than one in ten.
Firstly, one should remember when starting that the most important asset in the business is you. So it’s vital that you’re realistic with yourself and have your feet firmly on the ground. No matter what type of business you start or invention you want to exploit, it goes without saying that just because it’s your idea, it doesn’t mean it’s a commercial idea and will make you money.
So you need to be vigilant and do everything you possibly can to minimise risk, but how?
There’s no shame in knowing what you don’t know. As a business owner you will need to wear so many hats and have a wide skill set that it can feel daunting. But being an all-rounder doesn’t mean you have to be brilliant at everything either (not everybody with sales skills makes a good marketer) but you sure need to understand some basic principles and practice for a lot areas.
A keen desire to pick up as much information and advice along the way is crucial. Thankfully you aren’t alone. Many at the Business & IP Centre have benefitted from accessible, down to earth workshops that tell you the most important things you need to know, be it marketing or finance.
Workshops are great opportunities to share experience and meet others too. You can start to create your own network of contacts to help you in all the areas you need to know. It may well become your lifeline.
Secondly one should find out as much as you can about the market you’re moving into. Proper research is your gateway to better opportunities. To have a serious business someone needs to buy your dazzling new product or life enhancing service and it sure helps to know whom. Market research does just this by identifying consumer profiles, average spend, size of the market place, threats, opportunities and forecasts. All this is information gold-dust at an early stage that will save you so much time and money in the long run, even if it’s as simple as helping to guide you on the right marketing strategy.
Published content by some of the larger researchers out there is beyond the budget for most early stage businesses. The Business & IP Centre has taken this problem out of the equation by making freely available to its walk in users over £5 million worth of quality research on all major sectors and a good many small ones too. What’s more our Information Specialists in the Centre will point you in the right direction and show you what you need to know.
And thirdly one should ensure your new venture will need to be as safe from risk as possible. Getting the right legal structure and necessary insurance in place at an early stage will save you huge bills and endless stress later. Understanding what you need to do doesn’t have to be as complicated as it sounds. A database in the Centre called COBRA (Complete Business Reference Advisor) tells you in plain English many of the legalities and insurance issues you’ll need to address among other topics.
One should always consider what Intellectual Property there may be in the business too. Our Intellectual Property workshops and advice help to break down and explain how you can address this important asset in any business.
Finally, I would suggest not throwing all your eggs in one basket. Don’t quit your job just yet especially if you haven’t even had a single sale! It’s good practice to test and refine your proposition with a few customers that helps to prove the concept.
Remember, there’s never a shortage of help and advice to guide you, so help yourself to reduce the odds of failure.
Jeremy O’Hare is a Relationship Manager for the British Library’s Innovating for Growth programme, which provides £10,000 of fully-funded and tailored advice for businesses looking to grow programme.