How To Take on The Startup Gauntlet And WinAug 4, 2015 Blog Business Finance
As an entrepreneur, the bad news is, the numbers just aren’t in your favour. Don’t be disheartened though, you are not alone. The statistics suggest that 90% of startups fail. So, what’s the good news? The good news is that, as one of the market-savvy, agile few to make it through the trials and tribulations of the startup gauntlet, what hasn’t killed you will have made you stronger.
As one of the lucky 10% to successfully come out the other side of startup-dom thriving and moving onto business maturity we thought we would share our learnings with you. This blog will take you on a whistle stop tour through the pitfalls you face and impart our wisdom on how to avoid them in your quest to reap the reward worthy of your risk.
You offer a product or service that nobody wants
Believe it or not, according to statistics, this is the most common cause of failure. It may seem completely implausible that the majority of businesses fail due to a lack of foresight or market research, however, when you look at businesses such as Google and Apple it would seem that the stakes are high when it comes to offering people a product they don’t know they need yet. Let’s be honest, before you had an iPad would you have believed that a tablet could add value to your life? And now, now you are probably on mark 2 and wondering how you survived without it. As the majority of us do not share Steve Jobs’ foresight, money spent on market research is, clearly, a sound investment. Neglecting this cost could come at the expense of your business. Assigned your budget elsewhere? That’s ok, we can help you find a loan to cover your market research – a small outlay now could be your competitive advantage later.
Your CTO focuses on technology. Your CFO focuses on finance. Your COO focuses on operations
If, as the captain of your own startup ship you are looking at this title, scratching your head and wondering what the issue is, beware! Iceberg ahoy! Silos are a business-killer, especially in the early days. Of course, it is important for each person to work to their strengths and to have accountability for their specific role, however, as a startup it is crucial, no essential, not to fall into the trap of silos. How do you navigate these dangerous waters? Work as a team, communicate and be aware of what it happening across the board. A popular mantra within the entrepreneurial world is “work on your business, not in your business” meaning don’t be tempted to dismiss something as not ‘your job’ – if everyone thinks a task is someone else’s responsibility, no one does it. These gaping holes will swallow your business whole. Remember your job is the success of the company – whatever that looks like.
Ability to evolve and adapt
To adopt another nautical analogy, one of the best things about being a startup versus a corporate giant is the agility afforded by being a speedy pair of jet skis rather than a lumbering steam-liner. This is an advantage a lot of startups neglect to leverage. As a long established company if something isn’t working there are a lot of ‘hurdles’ that will need to be jumped in order to address the issue; legacy, hierarchy, politics. As a startup, if something isn’t working, you have a quick meeting with your partners, you agree what needs to change and you change it – simple! Yet, some entrepreneurs start out with the same mentality that they adopted when they were still working their nine-to-five, perhaps identifying the issue but not knowing how to fix it and so ignoring it in the hope that it would go away. We live in a VUCA world (Volatile, Uncertain, Complicated and Ambiguous) the ability to adapt and evolve is the only way any business can hope to survive and in that respect startups have the home advantage. Here at RainFin, we have done just that, bypassed the traditional approach to finance – adapting technology to better meet the needs of our marketplace lenders. Take advantage of our smart technology and.
You ran out of money
A whopping 29% of startups cite poor cash flow or exhaustion of funds as the reason for failure. That whopping figure accounts for nearly a third of all new SMEs (Small to Medium Enterprises)! Given the bleak economic climate that we have weathered over the past decade this is an unsurprising but nonetheless harsh reality. A 2014 survey stated that the majority of entrepreneurs fund their dream themselves:
Self funded 82%
Lines of Credit 41%
Friends & Family 24%
Venture Capital 1%
This figure indicates that entrepreneurship is limited to the privileged few, those who already have a significant bank balance and the financial security of a safety net should their endeavour prove less successful than they hope. If you’re confident that you have a winning business model or your company is ready to expand RainFin can help you reach your full potential.
Here at RainFin we match-make borrowers and lenders. As a borrower, with a good credit rating, you can take control and set the terms of your loan.
So, why would you choose RainFin over a bank?
- The entire process is online and paperless which means there is no need to organise a meeting with your bank manager at a time that suits all of the shareholders.
- Here at RainFin, with just one application your loan is visible to a wide range of lenders – which means you have the benefit of getting the best rate without having spent precious time shopping around or submitting multiple applications which can be damaging for your credit score.
- RainFin’s unique scorecard takes a comprehensive look at your business’ overall financial health and potential and not just its credit score.
- As your loan is visible to multiple lenders, all of whom want to compete for your loan, you are afforded the benefit of more competitive and flexible rates than those offered by financial houses who are able to offer access to just one lender.
What are you waiting for? Join us here at RainFin as one of the 10% of startups to succeed.
RainFin. The Smartest Way To Borrow And Lend Money