21-12-2007
Finance not the main reason for business failure
Many companies do not fail because of business finance issues, according to research by StartupCo.
Rather, those in business become disenchanted, believing that their original expectations were not realised, leading to a loss of motivation.
The director of StartUpCo John de Groot explained: "The generally-accepted statistics will all tell you that the main cause for failure is that there isn't enough money, from a lack of sales or whatever it is. That's a symptom, it's not a cause."
Mr de Groot went on to say that research by Barclays estimates that 48 per cent of businesses do not survive beyond their third birthday, which he partially blamed on unrealistic expectations.
He also believes that business finance comes below the pressure of becoming a boss in importance, as statistics from T-Mobile and Kingston University show that over a third of those asked found that their business impacted on their relationships with family and friends.
However, Mr de Groot emphasised that support was available to help owners get a realistic idea of what self-employment entails.