TGIF by Kelvin Chessa WHY START-UPS OFTEN FAIL Entrepreneurship is in the air and the recent entrepreneurship and start-ups event was such an enlightening experience, with guest speakers ranging from the most renowned of companies such as Microsoft, the inspiring story of the KIIRA EV SMARK, the hybrid electric vehicle from Uganda, not to mention the CEOs and millionaires in attendance. I was left dared, at the same time thinking on my next move as a dreamer and what would make me fail on the start-up am incubating. A 2007 report from the Kenya Bureau of Statistics found that 60 per cent of small and medium-sized enterprises (SME’s) collapsed within just a few months of their creation. And, according to a study by a US firm, only two-thirds of all small business start-ups survive the first two years, and less than half make it to four years. Why this case for most SMEs?? Lack of proper planning instigates this scenario. People have ideas but do not necessarily have a business plan to support them. This could mean insufficient analysis of the market available, insufficient working capital and insufficient resources, both financial and human. Entrepreneurs also need to understand whether the structure they are using is correct. A robust business plan is vital for the direction the business would take and also for investors to get a clear view of the structure of your business. The cash-flow must be well organized and planned. A lot of the failures happen because people spend before they earn. You must be able to handle your growth and control it. Rapid growth may be good but if not managed, it is often the reason for failure. In his book, Small Business Management, Michael Ames lists reasons for small business failure as a lack of experience, insufficient capital (money), poor location, poor inventory management, over-investment in fixed assets and poor credit arrangement management. Also personal use of business funds and unexpected growth, competition and low sales adds to the list. To protect your start-up from being part of the start-up failure statistics, experts’ advice that you should think grandiose, but zoom in on a niche. Get started once you find something, focus and execute. Decision will help you start, but Discipline will help you finish. Don’t try to be everything to everyone right away, start slowly and with time you will rise. The little that you know, know it well but it shouldn’t be the reason to know little. Don’t allow capital to dissuade you to be your own boss, and also on the other hand don’t allow making a lot of money be your First motivation. Focus on the customer, not yourself. Solve problems; meet needs; be unique. Meet you at the top. Have an inspired weekend, aspire in your inspiration!
Posted on: Fri, 21 Nov 2014 04:00:00 +0000
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