According to the Australian Bureau of Statistics, 40 per cent of new businesses in Australia fail within four years. No-one ever plans to fail, but when it happens it can be a major knockback, both financially and emotionally. So how can you put your business in the best position to succeed?
We at Intuit are committed to helping start-ups thrive, which is why we have joined forces with Startup Weekend to be its first national sponsor.
I recently chatted with a range of start-ups, customers and our App partners who shared with us the wisdom of hindsight and what they would do differently to ensure an easier journey to success if they started again today.
Whilst there’s no foolproof way to completely guard yourself against failure, knowing the most common pitfalls might help you avoid them.
1. You took your idea to market too late!
To launch a business venture you have to be confident in your idea but adaptability and open mindedness are crucial to the success of any business.
One tactic many successful Australian start-ups are embracing – particularly in the technology sector – is taking ideas to customers early on before investing too much energy on something that may not work. A piece of advice from those who are already established is to “launch earlier for more feedback”.
So, take your idea to a few potential clients, ask for feedback, and observe their interaction with your product or offering. Don’t be afraid to switch gears if something isn’t working.
2. You churn and burn precious dollars early on
If there’s one thing almost all start-ups would agree on, it’s the fact that getting started requires a major investment of time and it can send your head spinning when it comes to expenses – from hardware and software to labour, working space, printing, transport, and more.
Clearly, every dollar counts and spending on the right things is essential, so make a priority list and stick to it.
One Sydney-based start-up I spoke to said that if she could start her business again she would spend a lot less on marketing and buy smaller quantities of product up front.
Here, ensuring you have the right product-market fit before ramping up your sales and marketing efforts is a great example of how to avoid the pitfall of burning up precious cash early on.
3. Your ‘focus’ is on too many things
When starting a business it’s easy to get caught up with what you have to do rather than what you should be doing. One technology start-up refers to it as a “chess game – you have to think about what you are going to do before making your move”.
Any day you could be doing a thousand things, but being focused means you concentrate on the key moves you need to make to win.
4. The books aren’t balanced
Chances are that when you start up your business, you won’t know everything and you’re not an accountant. But if you don’t know where you stand financially each month, you could be on the road to ruin without even knowing it.
Shoeboxes full of receipts or Excel spreadsheets no longer cut it for a well-run start-up.
Cloud accounting technology has been a blessing for cash-strapped start-ups with a range of affordable platforms, apps and software available which allow you effectively manage the books, finances and cash flow.
Accounting software will not only save time through automation and reduced data entry, but also enable you to spot trends in growth numbers, predict cash flow and identify the best customers.
Furthermore, being able to work on the move is a huge bonus as you can easily access your data, anytime, anywhere on any device.
5. You didn’t have the right partners in place
If you come across a roadblock or experience uncertainty in your start-up journey, it’s essential to have optimistic problem solvers to work with – either as employees or as part of your support network – who are not only going to provide technical skills, but remain focused, creative and motivated when the faced with a setback.
So, as one hospitality start-up said to me, don’t compromise on the quality of people you work with – not even to solve small problems.
Whilst every start-up is different, setting the right foundations is key to ensuring longevity for your business. Focus on building the best product or service and arm yourself with drive, determination and positive mindset and be open to new knowledge and learn whatever it takes to succeed.
Nicolette Maury is the Managing Director of Intuit Australia.