To have a successful Start-up the Founders must know what they want, why they want it, and how to go about getting it (the writer’s own experience).
Start-up successes are seen in two ways. On the one hand some seem to get off to a great start, make steady progress and thrive. On the other hand, some struggle to get started and make any headway.
What are the reasons for this?
To put some context around this it is worth looking at the current (annual) statistics for start-ups.
General Failure rates –
42% of start-up businesses failed because there is no market need for their service
20% of business fail in their first year due to lack of experience – they feel they can grown without support
29% of start-up businesses failed because they ran out of cash
60% go bust within their first three years, a variety of reasons, but mainly through lack of vision, no robust short- medium- and long-term plan, which affects the business operation.
No of Start-ups launch in the UK each Year – Between 500,000 – 700,000
Failure rate since 2018 – 130,000 start-ups fail
% age failure rate – 26%
(Source: 31 July 2020 – Google search for Startup failure rate in the UK 2020)
It is well known that in human societies there is an accepted or natural phenomenon of ‘gain’ and ‘lost’. For example, there is an expectation for the ratios of birth against death each year published by the Office of National Statistics (ONS).
In the same way there is an expectation that business failures are natural phenomena.
There are discernible differences between start-ups that thrive and those that struggle, evident in the things they fail to do, of which these are found to be the main ones.
Struggling start-ups are not clear on what it is that they want to achieve – the end goal.
– Don’t appreciate the importance of knowing whether their idea for a business is feasible.
– Don’t research whether a market for their products or services exist.
– Don’t assess their financial positions, resulting in their start-up running into financial difficulties due to a lack of cash.
Other reasons stem from operating in the wrong market
– Poor partnership
– Poor marketing knowledge and skill
– Lack of expertise in their chosen industry
– A belief they can make it on their own because starting a business is easy.
It is not possible to report detailed statistical results for each of these reasons here, however, the latest statistical analysis of the overall performance of start-ups bears these out.
The start-ups that are thriving naturally take the opposite actions to those struggling. They have robust plans, often getting help and advice to execute their plans in the right way, thus building a strong foundation for their business over time.
In the current business environment, there is every opportunity to have a start-up that will thrive.
The UK is still Europe’s leading start-up nation, according to sifted.eu, attracting $12.5bn in venture capital funding in 2020, for tech start-ups, clearly demonstrating that there is no ‘gloom’ over the future for start-ups in the UK.
The fact is your start-up can be included in the statistics for those that thrive.
According to ‘Startup Statistics UK 2020’, 89% of start ups founded in 2017 survived the first year (Source: Office foy National Statistics (ONS)):
In 2020 there were 18,100 searches per month on Google UK on how to start a business, and 65% of 1000 UK employed adults that participated in a Google Survey in January 2020, want to start their own business. This represents almost two thirds of the British workforce.
This spells good news overall for start-ups in the UK, and help is available in the form of start-up and small business loans and cash grants, as available via the Princes Trust and others such as the British Bank, for start-up loans.
Free support via workshops, and free business mentoring options are available, both from government and private.
Information about these free resources can be found at startup.google.com.
There are great potential for start-ups to thrive, particularly so in the current climate.
It is an opportunity to be one of the thousands of start-ups (small businesses) that will drive the UK economy for now and the future.
Sources for financial information: https://www.simplybusiness.co.uk/knowledge/articles/2021/02/uk-small-business-grants/, and at https://www.startuploans.co.uk