According to Bloomberg Business, a whopping eight out of ten start-up businesses fail within the first 18 months of operation. This means that even if you are a budding entrepreneur who has come up with what you believe is an ingenious product or service idea, you only have a 20% success rate in your favour.
It is natural to assume that the main reason for most business failures is that they simply run out of money to fund operations due to overspending and piling debt. But Insolvency Services Australia (ISA) have identified and compiled a list of less obvious reasons why your company may find itself in an undesirable financial position:
- Lack of a unique value proposition. If the service or product that your business offers has no real differentiating features from other similar offerings in the market, it is likely your brand will soon become defunct. Identifying your differentiating value proposition in a competitive industry is critical to long term business survival.
- Failure to communicate your unique value proposition. Many businesses make the mistake of thinking they will flourish in the market once they have come up with their unique value proposition. The failure to communicate this proposition in a manner that is clear, straight forward and compelling will mean your target audience may not even hear about your product at all, let alone be persuaded to purchase from you.
- Lack of insightful dialogue with customers. A thorough understanding of your customers’ needs, wants, likes and dislikes is imperative to business success. Your company should be engaging in real dialogue with your target market, on channels that they use frequently.
- Experiment quickly. If you need to test customer demand or response to certain products or services, ensure you do this quickly and without excessive expenditure and piling up of debt.
If your company is suffering financially and you suspect you have no other alternative but to liquidate, ISA can help. Our professional team of corporate liquidation practitioners can provide you with free expert advice and assist you in the actual liquidation of your company.
For more information about ISA’s services, or for free advice, call us on our 24-hour hotline or complete our online enquiry form today.