The independence, happiness, and flexibility that being their own boss afford is the key motivation for the majority of individuals to start their own businesses. You have seen all over the news on young Gen Z or early millennium starting their own successful businesses and making huge profits. Not many are asking the important question of how they are able to get their business to that level of success. If you have started a business or currently doing one, you will know the difficulty of creating one. In this blog, we will look at why many startup businesses fail and how to start a successful business in Singapore.
What I, the Author have the share about starting a Business
Hi, I am Edmund, the founder of HustleVentureSG. I worked as a Real Estate Manager managing multiple UHNW (Ultra-high network) clients in Singapore. In total, I am currently managing over $100 million dollar worth of Properties in Singapore. Although I am unable to disclose who they are and what they do. I am still able to share what I have learned while working with them closely and understand their ways of creating a successful business.
Why most startup businesses fail
There are a number of reasons why close to 90% of all startups fail within the first five years in Singapore. Many startup businesses believe that starting a business is easy to do, can become a money-making machine quickly, or believe that they have strong demand for their products. They are wrong!
Not knowing how to manage their Accounting
The most common reason why startups fail is the lack of sufficient funding. Startup capital is an investment, and when you don’t have enough funds to start your business, you won’t be able to run it effectively. And even after a million-dollar or more investment in product development, marketing, and everything else it takes to get the company off the ground. The reality is that most new businesses fail because they never make money. This is usually due to poor planning and management of costs – before they even launch! Learning how to manage cash flow in the early stages is important.
Every founder needs to learn to be more financially literate with their earnings and spending in the business. Understanding their company will have to face a high burn rate at the start before generating positive cash flow from operations is common. Therefore, managing the spending on burn rate to drive positive cash flow is a thin thread between making huge returns and going bankrupt.
No clear understanding of Supply and Demand
The real world is not always as simple as it seems. Understanding supply and demand is crucial to running a successful business, but doing so requires an understanding of the factors that can affect the demand for a product or service.
Businesses fail because they fall into one of two categories. The first is that they have a great product but no marketing and distribution plan. This means the demand is out there but you have no way to reach your target audience. The second scenario is that the business has an amazing marketing plan, but their products are not relevant to buyer’s needs. If you do not understand those factors and do not have the ability to adjust accordingly. Your business may find itself in trouble.
Poor Vision in the business
Poor Vision in the business is one of the most common reasons why businesses fail. Sales don’t happen because of bad vision, thus leading to no profit for the company. They have no idea what a good business plan consists of, they don’t know the proper way to attract potential customers and turn them into loyal buyers, and they fail to gain profits from their operations, basically, they just don’t know how to do the business properly. When your product fails in the market there would be no one to blame but yourself!
There are multiple advantages to having entrepreneurs pool their complementary skill sets and share startup costs and risks with one another. However, many of the advantages of partnership can unfortunately also be a disadvantage. Statistically, up to 70% of business partnerships ultimately fail. This can be due to multiple reasons such as mixing personal relationships, unequal commitment among the partners, losing trust in one another, or having opposing values. It’s not easy finding the right partnership for startups.
Lacking Industry Expertise
Starting a business will require you to learn multiple skills and have a different aspects of knowledge on starting a business. This will cause many startup businesses to have a rude awakening that they lack industry expertise and will require to learn. This is where most businesses fail, they do not anticipate learning more than 1 skill in starting a business. Oftentimes, these skills are considered boring or hard to learn, causing many startup founders to quit midway after feeling demoralized.
Giving up too soon
Businesses are a lot like plants. They need time to grow, so they can reach their full potential. But like a plant that’s neglected, many businesses give up too soon. Unless you find ways to keep your business growing and thriving, it could easily become stagnant and die.
How to find the motivation to start and grow your own business
Getting the motivation to start a business is easy, maintaining it is another question. When you start your own business, there is a lot of uncertainty. In order to stay motivated and committed to your business, you’ll need to learn how to keep yourself motivated so that you can tap into that drive and achieve your goals. Read on to learn of ways to keep yourself motivated.
Setting the right plan to create the right path
To start a successful business, one must be prepared to plan way ahead for the company’s vision. It’s an iron clan rule that the company’s vision is the pillar that holds the employee’s motivation together. Take for example Tesla, it’s vision to accelerate the world transition to sustainable energy has brought about multiple employees and investors around the world to fight for its cause.
By setting for yourself a vision, you are able to focus better on the mission. The next step is plotting the path to reach the goal. Often time, startups get destroyed by having large expectations when just starting out. A great way to plan the path is setting multiple small goals which are branched out of large goals. That way, you are able to tackle larger goals.
Drive will die out, staying consistent matters
Atomic Habits is one of the best-selling books written by James Clear. It talks about how true business success is learning to be consistent with the work. The books talk about how the best business don’t happen overnight and what successful startups business do to reach success. Focusing on making small ‘atomic’ changes that can become a great influence on your business.
Most startups fail because they believe that their business would be growing in a linear motion. In actual fact, businesses grow on a slow curve, which creates a large void of perception of failed expectations. Which is commonly known as the Valley of Disappointment. During this stage, most businesses fail because they ran out of the drive to continue the business. This is why staying consistent with whatever you work on matters. 1% improvement may seem mediocre when viewed on a daily basis. However, when you have worked long enough, you will start to realize the compounded effect of that 1% improvement. To stay motivated in your business, one must focus on making daily 1% improvements so that the effort can be compounded.
Learn from successful businesses business approach
The best way to improve your business is to learn from successful businesses business approaches. You can learn that from reading books, watching videos, or engaging a mentor. As every business is different, you can start learning from someone in a similar field or competition. Business need to evolve and change their business approach often to fit with the current time. As Steve Jobs once said, “stay hungry, stay foolish.”
How a Successful Business is created?
People think that starting a successful business means changing the world in a huge way, but that is incorrect. Often time, starting a business should be viewed as a bridge to help customers get what they want. This can be anything, you can sell a table that is catered to the disabled, a tool to allow better user experience, and the list can go on.
So if you think you have the right service or product that you believe would have demand for the market. Then focus on setting up the business to link it up to customers!