Why Start-Ups Fail – And it’s Got Nothing to Do with Capital

When you’re thinking of starting a business, your top worry might be getting your hands on enough capital. It’s a valid fear – conventional wisdom suggests that a business won’t become truly profitable for at least a year.

But, while you’re scrambling around for cash, there are other things you should be focusing on. In fact, 46% of start-ups are doomed not because of lack of capital, but due to incompetence.

There’s a big difference between simply running a business and running it well. There are a lot of aspects to consider here. And skills from both the management’s side and the employee’s side are an extremely important part of that.

Maybe you have one employee that keeps messing up a client’s order because they’re careless or distracted. Perhaps you’re missing out on a valuable tax deduction because you don’t know any better. Whatever the case, incompetence at this stage of the game could kill your business faster than you might think.

Not hiring the right people for the job to save money is a false economy. So, is trying to take on everything yourself. Personally, I think that entrepreneurial magazines could be partly to blame here. They splash their pages with stories about entrepreneurs with nothing more than a dream and a tiny budget making it big.

We all love a story where the little guy has beaten the odds. But unfortunately, there’s only so much that you can accomplish with a can-do spirit in the real world. Getting your new start-up off the ground comes with a tough learning curve. And, unfortunately, this is the worst time to be making mistakes.

That said, if you’re prepared to admit that there’s a skills-deficit and are willing to look for a way to overcome that, your business story might end up being front-page news.