Start-Ups – How to Survive

21 July 2015, posted in News

Start-Ups UK

Figures from Companies House show that 581,173 Start-Ups were created last year while this year it looks as though the figure is going to be closer to 600,000. But with nearly 60% of Start-Ups failing in the first five years, what can you do to survive? Can Start-Ups blame the UK tax system or because they couldn’t get a loan from the bank? Or should Start-Ups look closer to home – was it just a bad idea or should more time have been spent on planning?

With the RSA revealing that the main reasons companies give for failing is the UK tax system, lack of bank lending and too much red tape, it’s not surprising that a new idea has arisen from the ashes – incubator and accelerator programmes. Research from 02 suggests that if a business is given proper support, more Start-Ups can survive. As Feilim Mackle, O2’s Sales & Service Director and O2 Board sponsor for Wayra in the UK says:

“Start-ups play an important part in contributing to the innovation the UK needs to remain globally competitive, and the report shows that accelerated start-ups have a far greater chance of success. …The rise in UK start-up programmes creates a unique opportunity for the entrepreneurs, but only if businesses and the Government take responsibility for investing in these programmes to ensure they offer long-term, quality support.”

Of those accelerator programmes that are able to quantify the number of start-ups still operating, they record a staggering survival rate of over 91%. However with only 1,100 start-ups being supported by 59 incubator and accelerator projects in UK, this represents only 0.1892% of the total number of Start-Ups that are created each year.

And also you will not be surprised to hear that the majority of incubator and accelerator programmes are based in London although the idea is slowly spreading to other parts of the UK.

But what help is there for the other 99.81% of Start-Ups? Theo Paphitis focuses on the business itself and feels that some of the failure of Start-Ups is preventable. “They haven’t done the research, they don’t know where to go for the right funding…they don’t do their homework”. You wouldn’t sit an exam without doing homework first and “a business is no different. It’s about knowing more than the next guy or girl and performing better, and the only way you can do that is through knowledge. It’s basic stuff but we don’t do it.”

Steps towards giving Start-Ups the best chance of survival:

  1. A business plan. It may seem obvious but many Start-Ups begin without any coherent strategy. You need to look at a number of different things from your Vision, a financial plan, raising capital and cash-flow forecasts.
  2. A good idea. There is no point starting a business if nobody is interested in your product. [According to CB Insights, 42% of Start-Ups claimed the reason they failed was a lack of market for their products]
  3. Know your competition. Carry out research and find out what else is out there, how much they charge, how they are getting their products to market
  4. Flexibility. From a one-man band to a group of business people starting a business together, you must be prepared to work hard and be flexible – at the start, you might have to carry out various jobs within your business from accounts, to selling, to making the product.

And finally

  1. Visibility. With customers using websites and social media platforms daily, this is a vital part of your business. As Colin Willman Chairman of Member Services for the Federation of Small Businesses points out “This [the internet] is a huge audience and relatively cost-effective to reach, meaning small businesses are able to spread key messages and increase brand awareness effectively. New business start-ups need a well-designed, accessible website together with a well-researched and planned social media strategy to successfully promote the business….”

As Walt Disney said “The way to get started is to quit talking and begin doing.”  Begin doing now, contact our team at Baqqa Creative web design and start your journey with a well-designed website at a competitive price!

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