Why Most Start Ups Flounder and Go Under

It is well documented that the failure rate for new business propositions of every description is extremely high in the early years of trading. This is not by coincidence, bad luck or happenstance; it is underpinned by a unifying factor.

Start ups that set sail in a sea of excitement, then flounder and go under, invariably do so because they discard the very compass that will guide them safely from port to port in their quest for survival, yet alone success. The devising of this compass was their initial act in the art of strategy making, and yet it is usually the first piece of equipment to be jettisoned.

The business plan

Those who refer to it every working day, revise it, refine it, are all the time developing a strategy for lifelong success. Those who use it once for funding and then consign it to gather dust on a shelf are developing a strategy for imminent failure.

And there are no exceptions, no exemptions.

Pop music, for example, is just as much an industry as any other you can think of, so why then are there so many one-hit wonders? Is it because the participants have no talent or because they're working with rubbish material? I doubt it, because they have already evidenced a degree of competence through early albeit transient success.

Those few who make the grade and manage to capitalise on initial attainment do so because they have a strategy for the future, a plan of action for fulfilment. The many that fall at the first hurdle are invariably represented by management that has neither the experience nor the wit to develop winning strategies.

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