Via Slashdot I have come to a very interesting article entitled Why I stopped being self-employed? In which an entrepreneur explains his reasons for business failure. Some of the reasons seem quite related to business in particular but I think you can generalize without much problem to any business. Let’s review what that person says and try to get general lessons applied to any business project.
Entrepreneur Startup
Little capital: It is very typical that businesses fail because they have little startup capital. Believe it or not the money fly. You have to have a cushion in case things run abundant slow. It’s always better to have a good proportion of debt versus equity.
Overspending: It has something to do with the money coming back. It’s best to keep a low profile until you get income. Controlling spending is the most important in the beginning.
Little and slow cash flow: Finding customers fast that pay is a priority. Money in and out, to establish a routine. Live long without customers is complicated. It is sometimes necessary but then it takes a lot more startup capital.
Unrealistic expectations: The author of the input drop it a little obliquely but had other expectations. I thought getting customers with a product to fund the development of another but the first product ate all resources. We must focus on something, do it right and be realistic.
I hope that the author will have better luck next time. Everyone knows that the errors are drawn good lessons, harsh in this case but ultimately lessons.
