Only 3% startups will make it to their 5th year. Zeifmans put out their top 3 reasons startups struggle. They should know. They look at a lot of startups.
No. 1 is Balancing Capital and Growth Needs. CB Insights found that 30% startups fail because they run out of cash. ( I wrote about that a few posts back ). The key is to understand cash flow, plan ahead and manage your burn rates.
No. 2 is Structural and process challenges – Zeifmans found that most entrepreneurs do not focus on fine prints in contracts, be it employment, corporate structure (ensuring you take advantage of tax structures like the big boys) that takes care of the basic hygiene if M & A scenario’s emerge. And lastly, Shareholder agreements. Zeifman outlines the most common mistakes Founders make include stuff like – protecting IP and, get this, not having an agreement at all.
No.3 – Managing time. Gallup found that delegation is the key to business growth and expansion. Founders who figured how to delegate produced 30% higher revenue.
The piece promotes Zeifmans services but makes points that you should think about. Some great links to information too.
Read the article here : Top 3 challenges facing today’s tech entrepreneur