When starting a new business, you’re bound to make mistakes but it’s important to see these as lessons to learn from. But what if you could learn from those who have made mistakes before, helping you not make them?
Business formation company SUAZ, have asked business experts to share their most valuable business mistakes and how they overcame them as well as data on why startups fail the most.
Why startups fail
As part of the piece, SUAZ looked into data from NerdWallet around the top reasons startups fail.
| Reason | Percentage of businesses that fail due to reason |
| Ran out of cash/failed to raise new capital | 38% |
| No market need | 35% |
| Got outcompeted | 20% |
| Flawed business model | 19% |
| Regulatory/legal challenges | 18% |
| Pricing/cost issues | 15% |
| Not the right team | 14% |
| Product mistimed | 10% |
| Poor product | 8% |
| Disharmony among team/investors | 7% |
| Pivot gone bad | 6% |
| Burned out/lacked passion | 5% |
Industry experts share their business mistakes
Ronald Osborne, Business Coach
I hired a friend who never found any success to run the civil construction side of my multi-million turnover business. There were a lot of red flags early on that I overlooked based on our personal relationship, and it hurt my team and me greatly. Once all was said and done, he cost my business upwards of £100k, plus the loss of two great employees.
My valuable takeaway was never to hire friends or family unless they met strict criteria and would be suitable for the role in the first place. I urge all business owners to take the time to find the right person for the job, even if it means passing over a close friend. It will protect your money and your personal relationships.
Joshua Pearson, Managing Director, Preaco Marketing
My most valuable mistake as a marketing agency has to be taking on bad clients. While clients are incredible, of course, some clients are just not compatible with the style or nature of work you are able to provide at a particular time. Through trial and error, I am much more selective of who I work with and make sure that it’s only ever an organisation that I know I can help. This has led to a much more positive environment and a happier work-life, as well as happier clients.
I would always suggest not saying yes to anything and everything just because it pays. In the long term, it really doesn’t. Instead, put the effort into finding the right clients first. Are there any other valuable business mistakes that come close? And any other lessons to share with other new business owners? I learn more about business every single day, and a lot of that comes from small mistakes, but those mistakes become less and less of a problem as things grow and scale up.
Claire Bartlett – Director, Arden Bookkeeping Ltd
I own a bookkeeping practice which I have run for eight years now. My most valuable business mistake was believing I had to accept every potential client that came my way. In the beginning, it’s hard to not just chase money and agree to work with everyone.
But I soon learnt to listen to my gut and if a client felt like they wouldn’t be a good fit, they most likely wouldn’t be! It is much harder to disengage with a client than say no at the beginning. Always make sure your clients share the same values and work ethic as you otherwise it can make your working day very difficult.
You can view the full piece here: https://www.suaz.co.uk/knowledge-base/valuable-business-mistakes