I asked 3 leading start-up business mentors to tell me the top 3 reasons why they think start-up businesses fail. I will straight away give you the reasons provided by each mentor, as I haven’t however requested permission to identify them as the providers of this information I will simply identify them as Mentors A, B and C, note that between them, these mentors have over 40 years of mentoring experience. Fasten your seat belts.
Mentor A –
- Lack of Planning
- Lack of Passion and Drive
- Lack of Experience
- Lack of planning
- Lack of resources (not just financial)
- Lack of persistence
- Poorly thought through decision to leave employment and get into business
- No written business plan or financial projections
- Unprofitable pricing structure (You need to calculate your break-even price and NEVER charge below this)
I am amazed at the common trend of ‘planning’, otherwise known as business planning or in it’s most simplistic format, a simple business plan is on thread that cuts across
I am amazed at the common trend of ‘planning’, otherwise known as business planning or in it’s most simplistic format, a simple business plan is on thread that cuts across. And I know how many aspiring business people might not generally like what they consider paperwork; but hey, that is the reason why several of the folks who have tried before us failed.
I have a documented business plan, but following this feedback, I will surely be reviewing it a lot more regularly than I do. Your business plan need not be war and peace, it could just be a 3 page document- it is quality over quantity that matters in a business plan.
Some guy named Osterwalder, created some nine building blocks of what is required for your business or planned business to function, I have copied it down below for your attention courtesy http://www.entrepreneurmag.co.za/
Create a one page document that answers these questions in as much detail and as thoroughly thought through as you can, you will have your first business plan in place, no matter how crude. All the best!
9 Building Blocks of a Business Plan
- Customer Segments: Who are your mass and niche markets?
- Value Proposition: What are you offering and why are you different?
- Channels: Look at the phases your product goes through. This is everything from awareness and distribution to after-sales service.
- Customer Relationships: How are you building relationships with customers and is it working?
- Revenue Streams: Look at what you are charging and if you could be charging more. How are you receiving your payments and does it contribute enough to overall revenue?
- Key Resources: What resources do you require to function? These can include physical, human, financial and intellectual.
- Key Activities: Ask yourself what activities need to take place in order to deliver on your value proposition?
- Key Partnerships: Write down who your key suppliers and partners are and how they contribute to your overall goals.
- Cost Structure: Look at fixed and variable costs so that you can see what can be improved upon.