The UK Insolvency Helpline recently published a list of the 65 most common reasons small businesses fail, according to their research and cases they have dealt with. The list certainly makes for an interesting read. Many of the points are worth bearing in mind if you are thinking of starting your own business or limited company.
The following things should be avoided if you hope to keep your business afloat and survive the initial weeks, months and years of starting up.
Poor Market Research
Many businesses fail because they failed to plan. Carrying out detailed market research and preparing a good business plan will help you manage your business right from the beginning – keeping goals in perspective, but also recognising opportunities and being realistic about the potential of your chosen market.
Failure to carry out adequate market research often leaves businesses with unrealistic expectations and unreachable profit margins which leads to their inevitable downfall. Our guide on market research will give you some points on how to properly research your market and the potentials of your business idea(s).
Failure to Meet Customer Needs
Success in business depends on making sales. Selling goods or services to the public requires fulfilling a need. Your product needs to meet the needs of the end-user. So in order to sell and sell well you need to both produce and market a product that can meet your customer’s needs and convince them that your product does just that.
Obviously the needs of your customer may well change over time. They will also vary from market to market, Country to Country and across demographics. Failure to adapt your product to changing times or changing needs may lead to falling sales and shrinking profit margins.
Complying With Legal/Accountancy Obligations
Many businesses fail because they fail to properly submit their accounts on time, fail to pay what they own in tax, vat or PAYE contributions or fail to meet other legal obligations. Did you know that as a limited company, failing to submit your annual accounts on time could lead to your company being struck off the register? Then there is the danger of fines and penalties, as well as criminal action.
Be sure you know your legal obligations and accountancy requirements before you get started so you don’t get into any bother.
Bad Debts and Cash flow Issues
Managing your cash flow well is obviously an important part of sustaining your business. Unpaid debts may be beyond your control, but there are solutions; factoring allows you to free up money tied up in unpaid invoices to keep the money flowing.
Keeping on top of your finances with daily bookkeeping will allow you to know how much money the business has at any one time and be aware of any potential problems that might arise. Our free bookkeeping software is perfect for small business owners looking to keep track of their accounts.
Get off t0 a good start with the Company Formation Agent that cares about your business! Call one of our helpful business consultants today on 0800 0828727 or order online.
Popularity: 1%
