A Free-Reprint Article Written by: K. MacKillop Article Title: Top Ten Startup MistakesThat Almost Always Lead to Business Failure
See TERMS OF REPRINT to the end of the article. Article Description: Over two-thirds of new businesses fail within the first few years. Protect your business startup against these ten common startup mistakes and get on the road to a successful company. Additional Article Information: =============================== 1188 Words; formatted to 65 Characters per Line Distribution Date and Time: 2010-01-28 10:45:00 Written By: K. MacKillop Copyright: 2010 Contact Email: mailto:[email protected] For more free-reprint articles by K. MacKillop, please visit: http://www.launchx.com/article-index.html AND http://www.thePhantomWriters.com/recent/author/k_-mackillop.html ============================================= Special Notice For Publishers and Webmasters: ============================================= HTML Copy-and-Paste and TEXT Copy-and-Paste Versions Of Article Are Available at: http://thePhantomWriters.com/free_content/db/m/business-startup-mistakes.shtml#get_code --------------------------------------------------------------------- Top Ten Startup MistakesThat Almost Always Lead to Business Failure Copyright (c) 2010 K. MacKillop LaunchX http://www.launchx.com/ Many startup ideas fail to ever be launched and many, many fail within the first year or two. In most cases, the failure has nothing to do with the business idea, but how the business side is handled. The business of entrepreneurship is business first, then operations (what your business actually does). The Top Ten startup mistakes that lead to ultimate failure are: 1. Insufficient Startup Idea Development -- Most startups do not fail because the business idea is bad. The problem is that many first-time entrepreneurs fail to actually plan the business before sinking cash into the startup. No matter how great a business idea is, it can't succeed without detailed planning. Take the time to work through every angle of your business idea. Not only will you have a better grasp of how far your business can go, you will also reduce your risk and prepare yourself to make the best decisions as you go. 2. Failure to Understand and Comply with Legal Obligations -- An unbelievable number of entrepreneurs leave the legal aspects of business startup to someone else or, worse, ignore them altogether. Eventually this failure to comply with legal obligations will come back to bite you...and the outcome can be devastating. Every entrepreneur must understand and secure all necessary licenses and permits, and set up compliance systems for taxes and fees due the local, state, and federal government. 3. Poor (or no) Marketing Planning -- Marketing is the lifeblood of every business startup, and it is more than business cards and a yellow pages ad. A significant portion of your time and expense budget should be dedicated to marketing. Poor or no marketing equals no sales...equals business failure. Do your homework before you launch to identify your target markets, figure out how to best reach them, and establish clear objectives and evaluations to ensure your marketing efforts are paying off. 4. Poor (or no) Financial Management -- Success in business is all about the bottom line -- no profit, no business. Keeping the books correctly is half the battle. Too many first-time entrepreneurs are willing to turn over complete responsibility for the books to someone else -- a dangerous decision that very often leads to business failure. Reviewing and analyzing the financial reports is the other half. It is critical for every business owner to understand what the financial reports mean and how a change in one area affects all the others. Cash flow issues are also major financial management problem for many startups in the earliest stages. Good planning before launching a startup will clarify how much cash on hand your business idea will need to succeed. Whether you consider yourself a numbers person or not, as a business owner it is critical that you take responsibility for learning and applying basic financial management skills if you want to succeed. 5. Sales Forecast Errors: Establishing your initial sales forecast can be difficult, but there are procedures you can follow to make it as realistic and accurate as possible. All too often would-be entrepreneurs build a sales forecast around what they would like to sell, rather than what they are likely to sell. While optimism is an excellent entrepreneurial trait, an overly optimistic sales forecast will leave you with serious cash flow problems and even greater difficulty in securing financing. For example, one business plan we recently reviewed appeared well-written and professionally laid out. However, the sales forecast reflected sales that required every member of the staff to bill out 19 hours per day, 300 days per year. Another retail business showed average total purchases at $230 each, even though the average price of their products is only $12. Assuming that each customer will purchase an average of 19 items each time they visit is unrealistic. Any competent investor will look for these errors. 6. Under-Capitalization: Not starting with enough capital to support the business through the initial stages is a common error. By thoroughly planning your idea, you will know how much capital you need to cover while you build your customer base, including working capital to keep yourself in ramen noodles until your business takes off. Good planning will also increase the chance of securing investors, whether public (banks) or private (family and friends). 7. Poor Web Presence: An effective web presence is an absolute must for any modern business. Simply posting a website is not enough. In fact, uploading a website without marketing it is like posting ad copy only in your own living room -- if your target market doesn't see it, it might as well not exist. Many recent startups have crashed and burned because the entrepreneur thought that simply posting a website to the internet would drive sales. It won't. 8. Leaving Critical Tasks "To the Professionals": Many entrepreneurs believe that a good idea and solid operations are enough to build a successful business, so they opt to turn over critical startup tasks, like marketing and accounting, to outsourced professionals. For some, the business side of business just doesn't interest them, so they choose to forgo learning the details of financial and marketing management. Eventually, these choices backfire. If you don't know how the money works, you can't make the best decisions for your business. If you are not aware of the outcomes of your marketing efforts, you can't accurately forecast sales and thus can't plan for the future. It's your business, you need to know and understand every facet from the beginning, or you might as well be working for someone else. 9. No Ongoing Planning and Review: As the actual operations of a startup take up more and more of an entrepreneur's time, it is very easy to overlook the critical tasks of reviewing and planning. Every aspect of a company should be reviewed periodically, particularly the financial statements and marketing plan. If you don't know where you are or where you have been, it's impossible to know where you are going. 10. Lack of Patience - Pit of Despair: Every startup experiences a period of time between being ready to sell and actually building the sales. We call this gap the Pit of Despair because the entrepreneur is left wondering if they have made the right decisions and whether the business is ever going to work. Many startups hit this point and the entrepreneur quits in frustration. Startups don't generally succeed overnight. The Pit of Despair should be used to refine internal systems, work through free internet marketing techniques (participate in relevant forums, write and publish articles, build website content), and plan for the future of the business. Don't let the inevitable delay destroy your chances of success -- plan for it, expect it, and use the time wisely. For the most part, a strong focus on the three keys of startup success (planning, marketing, and financial management) will overcome most of the common reasons for business failure. Pay attention to the details from the beginning, learn all you can about running your own business, and don't let anything get in the way of building your business into the thriving company it can be. --------------------------------------------------------------------- K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System includes step-by-step business startup procedures (http://www.launchx.com/features.html), small business software and more, to help entrepreneurs start a business based on their idea and avoid these top ten startup mistakes. Visit http://www.LaunchX.com/ for a free Business Readiness Assessment and get on the road to starting a business today: http://www.launchx.com/are-you-ready.html --- END ARTICLE --- Get HTML or TEXT Copy-and-Paste Versions Of This Article at: http://thePhantomWriters.com/free_content/db/m/business-startup-mistakes.shtml#get_code ..................................... TERMS OF REPRINT - Publication Rules (Last Updated: May 11, 2006) Our TERMS OF REPRINT are fully enforcable under the terms of: The Digital Millennium Copyright Act http://thomas.loc.gov/cgi-bin/query/z?c105:H.R.2281.ENR: ..................................... *** Digital Reprint Rights *** * If you publish this article in a website/forum/blog, You Must Set All URL's or Mailto Addresses in the body of the article AND in the Author's Resource Box as Hyperlinks (clickable links). * Links must remain in the form that we published them. Clean links should point to the Author's links without redirects having been inserted into the copy. * You are not allowed to Change or Delete any Words or Links in the Article or Resource Box. Paragraph breaks must be retained with articles. You can change where the paragraph breaks fall, but you cannot eliminate all paragraph breaks as some have chosen to do. * Email Distribution of this article Must be done through Opt-in Email Only. No Unsolicited Commercial Email. * You Are Allowed to format the layout of the article for proper display of the article in your website or in your ezine, so long as you can maintain the author's interests within the article. * You may not use sentences from this article as an input for any software that steals sentences from others in order to build an article with software. The copyright on this article applies to the "WHOLE" article. *** Author Notification *** We ask that you notify the author of publication of his or her work. K. MacKillop can be reached at: [email protected] *** Print Publication Reprint Rights *** If you desire to publish this article in a PRINT publication, you must contact the author directly for Print Permission at: mailto:[email protected] ..................................... If you need help converting this text article for proper hyperlinked placement in your webpage, please use this free tool: http://thephantomwriters.com/link-builder.pl Would you like to learn how to improve the performance of your article marketing campaigns? Download our F.R.E.E. 108-page Article Marketing Ebook at: http://thephantomwriters.com/ebooks/advanced-article-marketing.html ***************************************************************** * * This email is being delivered directly to members of the group: * * [email protected] * ***************************************************************** ===================================================================== ABOUT THIS ARTICLE SUBMISSION http://thePhantomWriters.com/ is a paid article distribution service. thePhantomWriters.com and Article-Distribution.com are owned and operated by: Bill Platt 3010 E Raintree Stillwater, Oklahoma USA 74074 Learn more about our article distribution services by visiting: http://thephantomwriters.com/x.pl/tpw/info/article-distribution/index.html The content of this article is solely the property and opinion of its author, K. MacKillop http://www.launchx.com/ --------------------------------------------------------------------- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ---------------------------------------------------------------------
