Entrepreneurs must always stay agile, alert, and at the top of their game to avoid failures that even seasoned entrepreneurs might face if they ever became casual in their approach. Performing consistently to the best of their ability and sometimes even stretching it to the maximum is the only way for entrepreneurs to avoid failures that affect most new ventures. Only 10% of the new ventures manage to enjoy the first anniversary, observes Vic Di Criscio. There are many reasons for new ventures failing to survive, and entrepreneurs must identify some of the main reasons to take guard against it and guide the business in the path of sustained growth.
Here are some issues that need the full attention of entrepreneurs to ensure that the business can survive by getting around the obstacles that threaten to collapse it.
Problems with funding
It is expected that new ventures struggle with funding that delays the startup, and create uncertainty. Good financing is necessary to start any business. And even subsequently during various stages as the business progresses and aims for growth. Having strong backing of some funding agency or access to some financial resources is essential. For getting the business off the blocks and helping it gather momentum. Predictions about fund requirements, especially for cash slow and revenue earning, can sometimes go wrong. It discourages investors from putting their money in the business, which can ultimately starve funds and kill them.
Liquidity problems and cash crunch
Most businesses fail due to poor cash flow management as entrepreneurs falter in forecasting the times of fund requirements correctly. Creating gaps between accounts receivable and accounts payable. As a result, the business starts limping instead of running. And becomes hard to regain the pace that can drive it ahead. Typically, new ventures create budgets by considering the revenue they would earn in the near future. But it takes some time to start the flow of money. Meanwhile, businesses might experience a cash crunch because of the lack of cash flowing into the system. And liquidity problems could deter investors from investing in the industry.
Like too many cooks spoil the broth, overstaffing can spell the doom of business. Businesses must have adequate staffing to run their operations smoothly. Insufficient staff strength can hamper the business operations that affect the performance adversely. It makes customers unhappy and can lead to so many crises. That the business might even come to a halt says VIC DI CRISCIO. Again overstaffing can hit enterprises too hard due to high overhead costs that render the operations unfeasible. Having optimal staffing comprising of a committed workforce is essential for running the show effectively.
Operational deficiencies and mismanagement
Soon after the business starts rolling, it is critical to help it gather pace at the right time. By ensuring professional operations management for delivering the right results. Failing to manage the business well will only drive it towards a dead-end. Where it might be impossible to put it back on the tracks.
Building a solid organization by recognizing the ground realities ensures that the business can overcome the challenges and deliver results.