A new study has contrasted the main priorities of business owners in the UK against the most common reasons for startup failure. Whilst over 50% of entrepreneurs cited growth as their main priority, over one third (35%) of businesses fail in the UK because of a poor or no business model, proving that goals need to be backed up by strategy.
Other results include:
- Over 1 in 5 of surveyed entrepreneurs claim that running out of cash was the reason for their ventures fail.
- Factors like efficiency and innovation were at the bottom of CEO's priority lists (8% each).
- Nearly a third of business owners list their primary objectives to be related to IT or to the development of their companies structure.
Economic Climate and Legislation Revealed as Biggest Issues Facing Businesses
- Over half of business owners prioritise growth as part of their business strategy with only 12% prioritising cost management
- ‘Wrong business model’ voted top reason for failure for entrepreneurs with growth seen as the biggest priority
- Legislation and economic climate are the biggest issues facing companies across 8 major sectors according to survey
The startup world is a fiercely competitive one, with companies across sectors opening and closing at a rapid rate. Safestore have carried out research to find the biggest concerns for biggest owners, their most fundamental goals, and what they believe to be the top reasons for a business failing.
Biggest Business Issues
In every sector, business owners are faced with a number of problems to solve every day of the week. We’ve looked at 8 major sectors to find what matters most.
- Legislation - Of all the metrics studied, legislation was the biggest concern on average. 30% of Agricultural companies place it as a key concern, with 1 in 5 owners of Transport, Real Estate and Business SME’s viewing it as a key issue.
- Finance - 16% of manufacturing businesses see cash flow as a large concern, more than any other sector. The same sector also ranks highest for worries over ‘access to finance’ with 1 in 10 stating it as a prominent issue.
- The Economy - Only legislation is a more concerning factor for businesses than the current state of the economy, affecting 20% of Transport and Storage businesses.
Goals vs. Mistakes
By taking a look at existing survey data, Safestore have been able to highlight both the primary objectives for a business owner and the most common reasons for failure. Some of the highlights from the research can be found below.
- Aiming High - Growth is unsurprisingly one of the most important considerations for over half business owners outranking all other key goals
- Tech & Structure - Nearly a third of business owners list their primary objectives to be related to IT or to the development of their companies structure
- Clear Objectives - Less than 1 in 10 business owners place efficiency and innovation at the forefront of their business strategy, prioritising more practical goals such as workforce and finance.
- No Idea - The highest proportion of business owners (35%) see the lack of a business model as the reason for failure
- Money Talks - Over 1 in 5 of surveyed entrepreneurs claim that running out of cash was the reason for their ventures fall down
- Hot Competition - 11% of those surveyed believed that ‘more able competitors’ were to blame for their companies’ demise, which is notable when a lower proportion value innovation as part of their business model.
Below is a more detailed breakdown of the survey results for goals and failures across business owners.