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It's interesting to notice that 9 of the causes of failure are due to poor financial controlling (as in terrible or absent financial controller/manager). Which
by kfk 11y ago
It's interesting to notice that 9 of the causes of failure are due to poor financial controlling (as in terrible or absent financial controller/manager). Which does confirm one of my thoughts about startups: they need huge margins to offset all the poor financial planning and accounting mistakes they do. It's not a bad strategy for many, but it is deadly for some. It's a pity given some solid financial controlling advice is not that expensive or hard to get, I believe.
- datasage 11y agoThis dataset seems to include all businesses and not just technology startups. In my experience, those who attempt to start small businesses often learn the hard way of the importance of accounting and financial planning. Can't just run a business out of your personal bank account.
- tonyedgecombe 11y agoFor businesses that have to buy in stock cash flow is critical, get that wrong and your revenue can collapse in an instant as suppliers stop shipping.
- simonswords82 11y agoCashflow forecasting at the start of any business venture is almost always guesswork. The best defence against lack of predictable income for startups is to simply keep overheads to the absolute minimum. This buys the longest runway and increases the chances of survival.
- kfk 11y agoRight, but you have to spend money at some point. Once you do, you need to make assumptions on how the future will look and keep track of things. If I assume a monthly OpEx of 100, somebody has to keep track of that number, the worst that can happen is to have an increase to say 120 and nobody noticing or thinking it's worth notice...