The researcher’s report graph underlines the exponential failure of startup business reaches 33% every first year and 45% within 5 years. And, the total percentage that can basket the ball is only 25%. These statistics have been constant since 1990. There are still odds that have got shutters down just after few days of inauguration as their account receivable management was weak.
According to researches by Investopedia, 784,715 new businesses were set up in 2019 and almost 523,414 got failed in a tenure of 2 years. However, to not be counted in a failed business column, you need to have full proved research for your business.
With good research, planning funding, and flexibility, businesses can find success and growth. We will walk you through the biggest mistakes a startup business makes and the best possible practices to improve the chances of success.
Top 6 Reasons Startups Fail
At times people focus on major tips and neglect the basic points that are the backbone of your business. Thus, here are those points that are neglected by new businesses that failed to rise. Let’s check out:
Not Proper Investigation
With business ideas and money, you began to work on your business project. Unknowingly, you forgot to have proper research of the market before setting your business. This becomes a blunder mistake overall and indicates that your money will fall into a pit.
Having a business idea is good but before investing your time, money, and hope, investigation of the market is mandatory. The investigation in terms of market value, growth, target audience, and best location. It’s quite difficult to convince customers to buy the product if you are not aware of the competitor’s strategies. For example, in the electronic market Vivo gave huge competition to the Oppo brand providing extra touch and camera features at the same price.
Business Plan Issues
Some businessmen think that if the investigation of the market is done, they are set to start their business. Not at all. An investigation is required to not fall into the trap but it’s your dream project. Thus, you need to plan strategies that will make you different from your competitors. Else you will always invest to change your strategies and when the peak point comes you will be at a loss.
For instance, if you have a grocery startup business idea then a location near an apartment will work best. Including daily usage products and maintaining quality will help you grow. Like, in your grocery business you can add products of dairy, medicines, and personal products. This will make people stop their car and buy all items from your shop.
Too Little Financing
It’s rightly said that you should start your business with less investment but less doesn’t mean avoiding the important sectors to invest in.
Like, if have a newly launched product and you haven’t invested in good marketing then there will be no market reach. Thus, there will no sale and you will be again at loss. Therefore, it’s necessary to know where financing is required in your business to build it strong.
Mismanaged Cashflow
Having a track of money is very important in any business. This is the major fault every startup does. They fail to have cash flow management and this brings them to a bankrupt position.
For this, you need to have cash flow management from day 1. It’s true, it becomes difficult to maintain a diary for your every outflow and inflow of cash. To overcome this many business sectors are using Invoicera for all online invoicing and cash flow management.
You can also use Invoicera software to manage your cash without much interaction. It will keep all your cash flow automatically without any glitch.
With account receivable management services you can check your transactions, investments of any year. The details are saved on the cloud.
For instance, if you are into real estate business, you are selling 2 flats and keeping 8 flats on rent, Invoicera will play a big role here. It will keep track of all rent receiving, maintenance automatically updates the actions.
The multiple features of this online billing software will avoid human error.
Bad Location, bad marketing
If you choose a bad location for your business setup then it’s obvious there will be poor internet connectivity. As we all are aware that digital marketing has overtaken door-to-door marketing, poor internet will lead you to poor marketing. Also, in today’s time, everyone carries smartphones with them.
If your location does not have good GPS strength then people will not be able to reach you. Thus, do select the location which has good internet connectivity. With a strong social media presence and running ads, you will be able to connect with your target audience and sell your product.
Remaining Rigid
Once you have set up your business and gained a customer doesn’t mean the process is over. In the business sector, you need to be updated, aware and active at the same time.
If you have a rigid belief that once you have set up your business, you don’t require any change then you are wrong.
The alteration is a must according to the market demand. For instance, there is a huge demand for smartphones and you are still selling basic cellphones.
Expanding too Fast
Many people start expanding their business at an early stage. Now, if you expand it also requires maintenance. And being your startup there are multiple things you need to learn and focus on.
People think expanding the business will increase revenue. However, there is a downfall too. Therefore, it’s recommended that you should expand your business only when having a hold on market.
Key Points for Startup Business
There are major pointers to keep in mind that will make your business succeed:
Idea
An idea that is exclusive gets instant demand than the businesses running for many years. Thus, try to get your business idea unique.
Research
How will you know your idea will work? For this, you need to have proper market research. Now, with research, you will know that your idea is unique or not, will that business idea work in the market, which location will be best for set up.
Budget
Every business requires a different budget. Therefore, first, check how much investment is required and what is your budget. If your budget meets the requirement then understand in which sectors you need to invest at an early stage. This will become your smart move.
Plan
Once your budget is finalized then start your planning. Plan what will you include in your business. Make a list of pieces of equipment and products. Also, plan how many staff is required for your business. Last but not least in planning is you should have account receivable management software for proper management of your cash flow.
Execution
After the planning, make sure execution turns like your plan. Not more or less than that. This will keep the balance of your budget and also there will be no distraction from your flowchart.
Final Thoughts
The primary concern is your cash flow management. And it should be managed from the time you start your new business. Be it any task, if you have entire detail regarding all involvement action then it will reflect no error in the process. Now, humans are considered geniuses but when it comes to multi-tasking, they cannot compete with machines. In the same context, cash management requires the platform that manages the cash inflow and outflow at the same time.
Now, coming to cashflow management software, how to understand which software works best for your business type? For this, you can have research of same business market for geting a clear view of the software.
To help you with this, our market research the most powerful software is Invoicera that is compatible with any business type. The enterprises and the startups all are using this software.
You can download Invoicera software for your account receivable management system. This will help in keeping track of your cash and business management. The reason it is preferred is that with this one software you can manage workflow, cashflow has visibility and streamlined processes. You won’t require two software for work management and account receivable management. Thus, it seems a good choice.
However, be attentive and have a concern on all the points before you start your new business and save it from getting failed.
