The market does not need the product or service.
42% of start-ups fail because there are simply not enough people interested or need the product that is being offered. For example, the Onzo bikes around Auckland city. Auckland is not a big city people are happy to walk and the public transport within the city is relatively good. Onzo found it hard to compete with these two factors.
Not selecting the right people.
Individually people can hold a lot of talent and skill however when put into a team they may not gel well with others. Your start-up is guaranteed to fail if there are problems between individuals.
Wrong business partners.
Like the last point individuals can be great and hold a lot of experience. Even can work for large brands but this does not mean they will be able to go past being an employee and turn into a business leader, innovator or problem solver. Some simply are better suited to be an employee. Before taking on any business partners make sure they have a desire to run a business and have proven leadership skills.
Competition taking over.
Most start-ups with a unique idea think they have no competition and they can always hold control of the market. That is not correct multiple successful products have been copied and replicated. Prime examples, Samsung copying Apple cell phone form factor. Be prepared for competition. If possible, have an action plan ready.
One of the hardest tasks is to decide how much your product or service is worth. A lot of business owners will fall into the trap of under cutting the competition. While this will attract customers, but you must balance cost vs profit. 18% of businesses will close because of costs are too high and the price of their product or service is too low. Make sure you have an accountant by your side they will be able to process your data and give you proper insight.
Cash flow problems
Cash flow is one of the deadliest problems for any organisation. Not planning out your expenses and predicted income. Not knowing your tax liability. Not actively reducing your tax liability and not keeping an eye on aged receivables. You must take care of all these points in order to run a successful start-up. At 93 Accounting we provide all year support and we will take care of all your IRD reporting and we will help you run your start-up. We do not simply provide accounting services. We will use our experience working with other businesses to help you become successful. Click here to contact us now.
Written by, Manan Sajjad