The High Risk of Startup Business Failure in South Africa [And How to Minimize This Risk]

South African startups, like those in the rest of the world, have an alarmingly high rate of failure.

The South African Failure Statistic

Depending on the industry the startup is engaging in and the economic cycle that the business is started in, the failure rate of South African Startups is a staggering 90%.

That means, only 10% of the entrepreneurs who set out this year to start their dream business will still have a viable business after 5 years. 90% will go through the pain and the embarrassment and the financial loss of failing to launch.

Business Failure Consequences

The results of losing a business range in severity – it could for example be:

losing income-generating time and suffering a gap on your employment record
losing the trust of your angel investor family and friends, and/or your bank, and owing a lot of people you care about and need good relationships with, a lot of money
A massive dent in your self-confidence, one that many entrepreneurs never really overcome
It may even end up in your personal estate being sequestrated due to sureties you had to sign at the bank, to be able to rent premises or equipment and with suppliers.

So why do so many startups fail?

There can be many reasons, but most are just variables of the top three categories:

A lack of knowledge and experience - of the science and the art of starting a new business.
Entrepreneur overwhelm - due to the pressure of the massive amount of work that it takes to get a new business set up
Running out of time and funds - before the business reaches a stage where you can generate enough income to sustain both the business and your family.

How can you minimize the risk of your business failing?

We have done extensive research into the causes of business failure and spent years finding solutions to minimize this risk.

We have 3 game-changing risk avoidance strategies for you, aimed at avoiding the 3 main risks of failure:

The Three Startup Failure Avoidance Strategies

Strategy #1:

The first, and most important step to take, is to link yourself with an expert business startup team that can support you during the business startup phase.

Why?

Well, with a 90% risk of failure, you need all the expert help you can get. Not so?

But make sure that the help you enlist is geared towards personalizing their advice to your personality, your unique business vision and is suitable for South African business challenges.

What works for one entrepreneur does not necessarily work for another.

And strategies that work in America or Canada or Europe do not necessarily work in South African under our unique conditions.

Execunex offers you just such an expert business relationship. Have a look at our service offerings.

Strategy #2:

The second risk avoidance step is to adopt a consistent and continuous program of business development, linked to a high productivity system and a Productivity Accountability Partner.

The challenges to set up a startup business is almost always under-estimated. You need to be able to become the person you need to be to successfully narrow your focus to what must be done and to keep your focus until it is done – and you need to do it at high speed.

The only way to do this is to become highly effective, and you do not have time to test and develop systems as you go – you will run out of time and funds and fail if this is your strategy.

So, get some fast expert help to personalize a solution for your entrepreneur biotype and your unique business.

Have a look at the Execunex Business Programs to find the right fit for your unique needs.

Strategy #3:

The third risk avoidance step is to get help to set up the basics of your business fast - some business setups go as fast as 30 days and less!

You can spend an awful lot of time just getting the knowledge to be able to source and select competent service providers to help you set up your basics. And business setup can cost you a small fortune.

The thing is, most businesses start out as one thing, an idea of what the market wants and what you can offer. But with time, as you develop your product-market fit, the business will undergo a lot of changes. It might even pivot into a completely different product offering than first anticipated.

Spending too much time and funds on your initial set-up will leave you without the resources to pivot successfully or to make the desired changes to get to a point of viable scaling.

So, get your initial business set up done fast and efficiently by making use of our Execunex expert Business Setup Program.

Get More Business Failure Avoidance Strategies

If you would like more insights into the causes of business failure and how to avoid then, then join our Facebook community of Business Failure Fighters here.