Research has shown that many start-up businesses fail in the first two years. According to statistics by Small Business Administration (SBA), 70 percent of start-ups fail in the first two years and only about 51 percent survive the next five years. With this kind of information, I have to try the best way I can to ensure that this business survives beyond the 5 years. To do this effectively, I have identified some major reasons why start-up fail and thus develop remedy to avoid the same for my business (Schaefer, Patricia).
After a close scrutiny on the types of pressures my kind of business will experience, I realized that the major one is competition. The business is likely to face increased competition from already established businesses offering the same services, direct competition. The competition will strongly affect the price the business will charge and the type of services we will be offering. Responding best to the above challenge will be a plus to the new business that will be established. Competition can be warded off by giving customers the best services than the competitors’ offer. Quality services will attract more customers and satisfy the present ones who will invite others and as such be a head of the pack. To do this I intend to hire the best professional tutors to teach. Another related reason for early business failures is Poor People Management Skills but this will be dealt by treating our customers fairly and hiring professionals to teach.
Starting capital. This has been and seems will continue being the main headache for most businesses that want to establish a foothold in society. With the business proposal, I intend to approach micro-banks for a loan. The loan will be used to initially cater for such services like rent, electricity, salaries and other miscellaneous expenses. Money generated thereafter will be used to repay the loan.
Location of the business. Location is critical to the success of my business and as such I will have to search for the best location; this will enable the business not only to survive but thrive as a bad location will spell disaster to an even better managed enterprise. The business will be located where my customers are, with easy access to the premise, safe and secure place (Schaefer, Patricia).
Lastly but not least is the issue of not planning ahead. For the business to have a foreseeable future we have to have a solid future plan and draw its directions and where we want it to be by a certain time in future. Many start-ups fail because of some fundamental shortcomings in their business planning. Without this kind of plan, it means that our business has no future and thus may wind up any time. In my business plan, I have shown the description of the business, the needed work-force, any potential problems, competition analysis and budgeting and managing the growth of the company. (Schaefer, Patricia).
Suppliers and customers for your start-up business