According to the Australian Bureau of Statistics, more than 60 percent of businesses decline to operate within the first three years of starting which is an incredibly intimidating figure. This is a hard, bleak truth but let’s face it. Such cold statistics are usual for entrepreneurs and business owners to read every other day. But what more important here is to understand that they do not intend to discourage entrepreneurs but want to encourage them to work harder and smarter.
There are various reasons why most Australian businesses struggle to endure. Whether you are just starting out your business or starting a new venture, it’s imperative for you to keep in check the points that lead to failure:
1. Inability in building up a great team
Teams that have the ability to innovate, adapt and execute well are great teams. Having such a team is one of the most important factors that can make or break a business. It doesn’t matter if you have a big or a small team, but it should be well connected. Each member of the team should know their respective responsibilities and should work continuously towards achieving the goal of the business. Without such a team, businesses waste time and money or simply dwindle.
2. Money Mindedness
The first suggestion here will be not to start a company if your main focus is money. Instead, try to understand your customers. You will have to believe that your life’s mission is to help people around and make their life easier in any way you can. Direct your plan towards a problem that you deeply care about. Many new business owners think that their idea is so brilliant that the only thing they need to do is build the product, launch it for the world and then wait for the money to come in. This is the most common delusion which is a major business killer.
You will have to understand your customers and see their problems. Only if you promise to solve their painful problems that nobody else is trying to solve, only then they will try your product.
3. Lack of proper planning
Whenever you are going on holiday or exploring an unknown place, you should have the roadmap before leaving for the new destination. This will make the journey convenient and will take you to the destination easily with fewer problems. Same goes for businesses. It’s important to have an actionable strategy so that it allows you to create alignment, engagement and ownership of your business.
You have a good idea, and you have discussed it with all of your friends but getting their approval and applause won’t take you to the lead. Instead, you need to have that strategy and proper planning which will take you ahead.
Even if you have a brilliant plan, but you are not following it until the end, this is also a major issue. There are three key stages that the Business goes through before coming to execution: First stage is where you come up with the concept.
The second stage is that of basic planning. At this stage, you have to make a plan and do the basic preparation for executing this plan out.
The third stage is about defining details. In this stage, you have to go beyond basics and work on the details of your plan and business.
Latest surveys have shown that most failed business owners stopped planning at the concept stage only. Therefore, it’s a good tip here for you that go through all the three stages and keep moving ahead as per your plan.
4. Lack of clear leadership, Vision and Direction
Your team will work efficiently only if the leader takes the full responsibility. Even if you have hired world’s best engineers but if the leadership skills are not there in the one who is leading, the team cannot work well. In fact, not just for tech teams, but for any project to work, it should have strong leadership. Leadership is the key ingredient of the corporate culture. Poor leadership has a high impact on every area of a business, be it low employees’ performance and morale, decreased engagement, retention issues etc. It has its own ramifications on whichever level it might be coming: from the front manager to all the way to the top level executives.
Weak and poor leadership leads to ill effects on employees. Issues such as increase of mediocrity, misunderstanding and errors, inconsistent business performance, low standards, deterioration of work ethics, employee dissatisfaction etc. arise when the leadership of your team is frail.
Needless to say, leadership should be strong and stout enough. Your tech team’s leadership will need excellence in 3 major areas: business, people and technology. If the leadership doesn’t have any one of these, then you are ruined. A direction is always needed. If the team members are not shown the direction they are moving in or how they are helping the business individually; they will become directionless, disheartened and annoyed. Hence, a highly productive team needs strong leadership, vision and direction. You must have often heard that a business which has failed either lacked in creating the vision or couldn’t take the right direction to drive that vision into reality. Now, you will not be much astounded if one says that a good leader is the one who creates vision and direction for the business and subsequently delivers that to his team.
5. Lack of capital and financial management
Improper cash flow planning is one of the main reasons why businesses fall short not only in Australia but other major countries of the world as well. Here business people fail to understand the probable market conditions and formulating appropriate strategies to fight those areas which are unfavourable to their business. Inadequate planning and execution lead to poor financial management that leads to business failure. Scarce cash flow or high cash use-both can lead up to disaster. Without ample amount of money to pay creditors or run your business, you’ll quickly find your business failing and will take over a series of debt and other money issues.
Businesses can fail even with the best plans in place. To give your new Australian venture the very best chance at succeeding, pay close attention to these factors. You must be able to identify and measure failure issues so that you can truly fix them. When you respond to the concerns of your business and retort to the pitfalls, your business will reach incredible heights.