Fear of Failure: How to learn from others’ mistakes…
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- Kennedys Accounting Ltd
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Do run your own business? Do you dream of becoming your own boss? Is a fear of failure holding you back? In a free workshop at Kent 2020 Vision Start-Up LIVE on 22nd October, Sue Nelson from RIFT Accounting will highlight the most common reasons for failure – so that you can avoid them.
When reading the financial pages of the daily newspapers or listening to the business news on TV, it’s easy to believe that big businesses are the key to the economy; driving us forward and providing employment to the masses. But this simply isn’t true.
Of the 4.8 million private sector businesses in the UK, 99.9% are SMEs (Small and Medium Enterprises) of which 75% are self-employed people (that’s 3.67 million) and 20% employ less than 9 staff (just under 1 million small businesses).
The real employers and engine room of the recovery are these unsung heroes who set up on their own. Yet a fear of failure means that many potential entrepreneurs never take that first step towards achieving their dream.
It’s not surprising they’re afraid. Being a UK startup is not for the faint of heart: 20% of businesses fail within the first year and another 50% will not survive the next three years. So, of the 330,000 new businesses set up in the last year, less than 100,000 will survive in the medium-to-long term.
But what about that dream? The one where you do something you love instead of sitting at your computer for another dreary day? The one about making that small fortune?
Don’t despair just yet. According to ONS and the Department for Business, Innovation & Skills (BIS), here are some other facts that don’t get mentioned on the news:
- Last year 37% of new businesses were started up by women
- 60% of new businesses are being set up from home
- 33% are in London and the South East
The Financial Times Guide to Business Start Up found that one-in-five failed businesses would still be trading if they had sought better financial advice and support at the outset, with the most most common reasons for failure being:
- Lack of information on financial performance: You must understand your finances so if there are any underlying problems you can take corrective action in time.
- Turnover-led instead of profit-led: Don’t be tempted to concentrate on maximising sales instead of focusing on controlling costs and increasing profits.
- Taxation and legislation: Don’t get into trouble with the ‘authorities’ – understand your responsibilities at Companies House and with HMRC.
- Cashflow: Monitor and control debtors and creditors in order to keep cash flowing through the business.
So if you have a great idea and real passion for your new venture, what can you do to overcome the fear of failure and ensure that, when you make that leap, you are one of those who succeed? The best way if to actively seek specialist advice and support during the setting up process. If you are going to become a start-up hero there is no such thing as a stupid question and we're here to make sure you can find out all you need to know.
Sue Nelson is the Director of RIFT Accounting and will be hosting a jargon-free workshop from 10.20-10.50am at Kent 2020 Vision Start-Up LIVE. Join her on Wednesday 22nd October to find out all you need to know about starting a business but were too afraid to ask.
If you're not in Kent, or can't make the event, never fear! Give us a call or drop us an email and we'll be more than happy to chat with you.