Most start-ups \u2013 maybe as many as 90% \u2013 fail. That\u2019s a daunting statistic! However, most of these failures weren\u2019t inevitable. With more knowledge comes a far better chance of turning a start-up into a solid, established business. We\u2019ve put together the top ten mistakes that start-ups make \u2013 and how you can avoid making those mistakes.<\/p>\n
1. Losing the why<\/strong><\/p>\n It\u2019s important to know why your business exists, and why it\u2019s valuable to your customers \u2013 both current and potential. Without a clear purpose, it\u2019s easy to spread your time too thinly between lots of different endeavours, and that way lies failure.<\/p>\n 2. Mixing business and private expenditure<\/strong><\/p>\n Always, always have a bank account dedicated to your business income and expenditure. Too many startups mix up their business and private finances, causing headaches and lots of time\/money spent clarifying the business position.<\/p>\n 3. Incorrect business structure<\/strong><\/p>\n Ensure that you have the right structure for your business, or you risk losing other assets like your house and car if things go wrong. Ensuring that your business is structured in the most tax-effective method can save you from paying unnecessary taxes.<\/p>\n 4. Unwise partnerships<\/strong><\/p>\n Lots of highly successful businesses began with a couple of mates who came up with an idea and decided to partner with each other to make it real. But lots of unsuccessful ones started this way, too. It\u2019s important to ensure that both partners agree on direction, roles, responsibilities, and how the profits will be shared. It\u2019s also essential to ensure that an exit strategy is agreed upon and made available from the start \u2013 partnerships do break up, sometimes amicably, sometimes not. Planning for the possibility can make a breakup much easier on everyone and the business.<\/p>\n 5. No vision, no goal<\/strong><\/p>\n It\u2019s important to have targets, and to measure the business\u2019s current status in relation to its targets. Are you on track? Are you nowhere near meeting your targets? Why not? The sooner you identify problems, the sooner you can create solutions.<\/p>\n 6. Diving in before checking for \u2018No Diving\u2019 signs<\/strong><\/p>\n Do your research into the feasibility of a proposed business before setting it up. In particular, ensure that legislation in your state and council area actually permit the activity \u2013 and that licensing costs, if any, won\u2019t eat up most of your profit.<\/p>\n 7. Disorganised books<\/strong><\/p>\n A lot of start-ups begin with paperwork everywhere\u2026 perhaps some business receipts clipped together in a drawer somewhere. This can escalate very fast into total chaos. Get bookkeeping software, learn it, and use it. You might regret the time spent getting up to speed, but you won\u2019t regret the hundreds of hours that it will save you over paper-based bookkeeping over the years. Good bookkeeping allows you to quickly provide financial information about your business whenever it\u2019s needed.<\/p>\n 8. No rainy day fund<\/strong><\/p>\n Every business needs some capital to fall back on if income suddenly drops or large, unexpected bills come in. The amount will depend on the volatility of your business\u2019s income and the risk of unplanned expenses, but most businesses need an absolute minimum of one month\u2019s income available.<\/p>\n 9. Uninsured<\/strong><\/p>\n Having the right insurance can be the difference between losing your business and keeping it running. Is your business insured against potential lawsuits? How about interruptions like a fire or even extended loss of electricity?<\/p>\n 10. No marketing direction<\/strong><\/p>\n It\u2019s very important for you to know why your business exists, but it\u2019s also important for your customers to know why it exists. Without a marketing plan and sales strategy, you risk sending mixed messages to consumers and losing their sense of who and why you are. If marketing isn\u2019t your strong point, consider getting advice from a marketing professional.<\/p>\n","protected":false},"excerpt":{"rendered":" Most start-ups \u2013 maybe as many as 90% \u2013 fail. That\u2019s a daunting statistic! However, most of these failures weren\u2019t inevitable. With more knowledge comes a far better chance of turning a start-up into a solid, established business. We\u2019ve put together the top ten mistakes that start-ups make \u2013 and how you can avoid makingRead More \u00bb<\/a><\/p>\n","protected":false},"author":1,"featured_media":215,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":"","spay_email":"","footnotes":""},"categories":[34,10,32],"tags":[],"class_list":["post-192","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-free-stuff","category-news","category-startups"],"jetpack_featured_media_url":"https:\/\/www.trakaccountants.com.au\/blog\/wp-content\/uploads\/2017\/05\/blog-10-startup-mistakes-trak-accountants.jpg","_links":{"self":[{"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/posts\/192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/comments?post=192"}],"version-history":[{"count":2,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/posts\/192\/revisions"}],"predecessor-version":[{"id":207,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/posts\/192\/revisions\/207"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/media\/215"}],"wp:attachment":[{"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/media?parent=192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/categories?post=192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.trakaccountants.com.au\/blog\/wp-json\/wp\/v2\/tags?post=192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}