Over Half of UK Start-ups Fail Within 5 years. Some of these fail dramatically while others spend years slowing down until they finally come to a stop. The reason that start-ups fail is unique to each business and there is hardly ever a single cause. The following data was researched and analysed by CB Insights which lists the main reasons why start-ups didn’t succeed. At S4B we specialise in successful Business Start-Ups and are committed to their success. Reason 1: No Market Need It’s obvious that for a business to be successful it needs customers who are willing to buy the product or service. Before you form a start-up, you need to do your research and make sure there is a market for your product. Reason 2: Running Out of Cash Running out of cash is a serious problem for many small businesses who do not have the correct infrastructure set up. However, it is easy to significantly improve cash management by being more aware and in control of various aspects of your business. Previously we have discussed ‘The Reason You Keep Running Out of Cash’, in case you missed it here’s a summary:

• You cannot manage your cash effectively without a cash management tool. This is vital.
• Start your credit control at the start of the relationship with your client, not the end.
• By making your business processes more efficient, your cash balance will improve.
• Choose the right funding option for each element of your business.
• Don’t neglect tax.
• Plan for the unexpected and have a buffer in cash.
• Have a business plan that ensures that the company will be profitable and cash positive.
• Keep monitoring profitability and cash flow and act on it.

Reason 3: Not the Right Team Having the right management team has been proven to be critical to the success of every start-up. It’s critical to bring a diverse skills set to the table and a range of opinions into the decision making process. Your team needs to be passionate about the success of your business. The team needs to be co-ordinated, working to a business plan and be a team! Reason 4: Getting Out-competed For your start-up to be a success you must be different. You need to implement strategies that will:

• Help you to stand out from the crowd.
• Attract customers easily.
• Remove price from the mind of the customer.
• Provide added value that no other competitor can compete with.
• Acquire the right type of customer at the right price.
• Achieve everything your skills, effort and experience deserve.

Every single one of the failures on this list is avoidable. Reason 5 Pricing/Cost Issues You need to understand your own costs. Can you buy cheaper? Are your staff costs too high? Are your overheads too high for the level of sales and gross margin? Then, what is required is to make a profit. However, you cannot just choose a price. You need to understand what your competitors and the market are charging. Your price does not need to be cheaper, but if you are charging more then you need to, ensure that you can justify this higher price by better quality or reliability.   The S4B Team We are a team of Profit Consultants and Chartered Accountants who work with Start-Ups to help ensure their success and fulfil their potential. Send our team an email at [email protected] or call 01628 623444 to see how we can help you.