📉 90% of Start-ups Fail. Here's Why.

Industry News Round-up

• Although the Super Bowl isn’t until February, CBS has already sold out of its TV ad slots earlier than expected. A 30-second commercial costs between $6.5 to $7 million.

• Europe bans Meta from using targeted advertising using personal data on both Instagram and Facebook unless the user gives explicit consent to do so.

• A new ChatGPT update will allow users to create and publish their own versions of the chatbot. Users will be able to share, buy, download, and use created versions at the all-new GPT Store. More on this soon.

• Shopify now lets stores create product bundles, with the view to increase average order value while offering discounts to customers ordering multiple items.

• Fast fashion online retailer Shein buys Misguided from Frasers Group. Shein is doubling down on its UK operations after facing increased competition from rival ecommerce giant Temu.

• Amazons revenue and profits soar by record-breaking amount, up 13% to £118.05bn in Q3 this year.

Up To 90% of Start-ups Fail - Here’s Why.

According to recent data from ExplodingTopics, up to 90% of start-ups fail.

That’s pretty staggering.

Whether it’s a lack of cash, lack of customers or lack of know-how, these are the top reasons businesses fail and importantly, how to avoid them.

Lack of Capital - One of the main reasons why businesses choke.

Cash-flow forecasting is key here. Know your pricing, know your margins and know your cashflow.

Use your historic data to predict, plan ahead and prepare. If you’re a services business, always invoice promptly and set due dates for your customers to pay you by. 16% of start-up failures are due to cash-flow problems and financial issues.

Poor Audience Research - 34% of start-up failures are due to a poor product-market fit.

Entrepreneurs think they have a killer product, the issue is, no one wants it. From bad pricing, lack of customer understanding or poor design, audience research would save a whole lot of time and money.

Find who you think your target audience is, talk to them, get their feedback and make something that resonates with them.

Lack of Adaptability - This has been the downfall of even the biggest brands.

Businesses have to be adaptable, the last couple of years have been great examples of that. Whether it’s failing to adapt to market conditions, or failing to adapt to changing consumer behaviours, which led to the downfall of Toys’R’Us - being fleet of foot is crucial.

Watch your competitors and follow industry and consumer trends. See how your products and/or services compare to what’s changing. Do you need to diversify or adapt your offering? Just because you’ve just started your business doesn’t mean you don’t need to adapt before long.

Poor Marketing - 22% of businesses fail due to not implementing the correct marketing strategies.

From product marketing, SEO, PPC, email marketing and everything else - if a business fails to effectively market and build its brand, it will lose visibility and trust with its audience. Once it loses visibility and trust, it’ll find itself on a very slippery slope.

Lack of Expertise - Just because entrepreneurs try to do it all, doesn’t mean they have to know it all.

The entrepreneurial journey demands a broad skill set and a deep understanding of various aspects of business, from product development and marketing to financial management and operations.

Inexperienced founders may struggle to make informed decisions, execute strategies effectively, and navigate unforeseen challenges.

A lack of expertise can hinder a start-up's ability to innovate, adapt, and ultimately thrive in a competitive market, making it susceptible to failure.

The Outpost’s Opinion: A Business is never guaranteed success and failure is part and parcel of the game.

The underlying component here which ties most of these points together is a business plan. Make a good business plan before you start. Include both short-term and long-term strategy, finances, market and audience research. It may change as you go and learn new things, which is absolutely fine, but it will give you a clear and strategic roadmap for your business.

Am I Ready To Be An Entrepreneur?

Being an entrepreneur is one of the most challenging paths anyone can take, but the rewards? They can be immeasurable.

Whether you’ve got a brilliant idea that's been bouncing around in your head, or you’ve got a side hustle off the ground and you want to make it a full time thing.

One of the most common questions we’ve seen is ‘when is it the right time’ to take the leap?

You need to be 100% certain that it will work and you’re ready to be an entrepreneur, right? Wrong. You're not ready. In fact, you'll never be ready. And that's okay… Let me explain.

1. The Illusive 'Eureka' Moment

First things first, let’s address the idea of the 'Eureka' moment.

The truth is, it's a myth.

The chances of you having that one perfect idea that will guarantee your success are about the same as winning the lottery.

Instead, business success usually comes from a series of iterations and pivots, not a single stroke of brilliance. Failing, learning, picking yourself up and trying again from a new perspective.

It’s about growing, learning and failing. Yes, failing. Short-term failure is the fastest way to long-term success.

2. The Risky Business of Risk

The risk of failing is one of the most debilitating feelings entrepreneurs can have. Often the thought of it is enough to stop people from simply starting.

If you're waiting for the day when there's absolutely no risk involved, you'll be waiting until the end of time.

Of course we’re not telling you to spend your last penny on perusing your dream. But there will always be uncertainty. If you can afford to take a gamble on yourself, embrace the risk; it's your ticket to the entrepreneurial circus.

3. Expertise? What's That?

Entrepreneurs often worry they lack the expertise needed to succeed. Newsflash: no one is born with the perfect entrepreneurial skillset.

You'll learn as you go, and you'll make mistakes and learn some more. You might feel like a clueless newbie in the beginning, but that's how you grow.

So stop stressing about not being an expert. Remember, experts were beginners once too.

4. Money Matters

Money is not an obstacle; it's just another part of the entrepreneurial adventure.

The truth is, you may never have all the money you think you’ll need. But that doesn’t mean you can’t start.

Does money make starting a business easier? Of course it does, but if you have an attitude to make things work whatever happens, you’ll go a long way.

If you are self-funding, as many start out doing, just be sure to cover yourself for your essentials. Supporting yourself and family always comes first. Only invest what you can afford to.

5. Perfection is an Illusion

If you're waiting for the perfect moment to start your business, you'll be waiting forever. Perfection doesn't exist in the entrepreneurial world.

Your product will never be flawless, your marketing will never be faultless, and your website will never be 100% perfect. Get comfortable with the idea that you'll always be a work in progress. Just like your business.

6. The Waiting Game

Lastly, one final mention to the "I'll start my business when I'm ready" fallacy. Once again, you're never going to feel fully ready.

The only way to become ready is to start and build up your confidence and your business as you go. Plan your business, prepare your strategy and just start.

The Outpost’s Opinion: Always weigh up the pros and cons before you start a business. Make a plan, carry out market research and prepare cash flow forecasts. After that, if you can afford to do so and think you’ve got a shot to make this work, just start.

Entrepreneurship is one of the best learning experiences and journeys you can take. Don’t be afraid of failure, it’ll be the making of your success.