Starting a new business is an enormous challenge and requires a lot of courage. So, what can you do to give yourself the best chance of succeeding? Here are some tips from the specialists at FoodNavigator.

Why is it so difficult to create a successful start-up?

Let's be honest, starting a new company in any industry is not easy. In fact, it is extremely difficult and comes with a host of financial and reputational risks. So, why do so many start-ups fail and how do others succeed?

Entrepreneurs face a range of challenges when setting up a new company. From securing initial business loans or investments to securing distribution channels, it is a tough battle.

But ask those who have succeeded from the start to an established brand and I am sure they will say it is worth it. However, it cannot be denied that many companies will not reach this stage.

Many fail

According to the market trend company Exploding Topics, 10% of start-ups in all industries will not survive beyond the first year. Another 70% of start-ups will fail within the next four years. And a total of 90% of start-ups will fail overall.

Yes, these are grim numbers, but knowledge is power, and understanding the risks will help ensure that the decision to create a new business is not taken lightly and that all necessary preparations are made. But why do so many start-ups fail?

"There are many reasons why start-ups fail," said Stephen Minall, founder of FDReviews, while speaking at IFE 2024. "It might be a husband-and-wife team that divorces or a brother-and-sister partnership that breaks up."

However, sufficient funding is by far the main reason why new businesses fail.

"New businesses often run out of money," adds Minall. "It is very, very hard to do it now on a small scale."

Another major issue, particularly for start-ups in the food and beverage sector, is actually getting their products into stores to sell them.

"Most supermarkets are very hard to access," says Minall. "A supermarket is not a TARDIS; if your product gets on the shelf, then something else has to give."

So, what can you do to help mitigate these risks and give yourself the best chance of success?

How to help your start-up succeed

Do your homework: make sure you know as much as possible about the industry, including supply chains, production plans, and competition.

"Do your research," says Minall. "Go into supermarkets, look at the shelves, look at the shelf space to make sure your product fits the shelf height. I have seen hundreds of brands where the bottle is the wrong size or the jar of jam looks great, but you can't get the product out."

Develop your network: get to know people in your industry who can advise you on the different stages of creating, launching, and developing your business.

"You may find that there are different people with different experiences who can help you in different parts of your journey," says Bruce Isaacs, partner at Hospitality Management Solutions.

Set goals: make a clear plan for how you want the company to develop so that you know what you want to achieve and by when.

"Set some KPIs so you can measure your progress," says Dan Barron, non-executive director at Just So Care Ltd.

"KPIs are crucial."

Talk to a business consultant: consultants can guide you through some of the more complex business processes and advise you on key decisions. But choose that consultant carefully, as you will be financially invested in them and they will have an influence on your company's success.

"Look at LinkedIn, get case studies from them, tie your contract to results, and trust your instincts," says Daniela Busseni, senior consultant at IGD.

Find the right distribution channel for your product: you don't necessarily have to sell your product through a supermarket, especially at the beginning when your brand and products are unknown. There are several alternative options, including online stores like Amazon.

"There are Amazon experts who can help you if you want to go the e-commerce route," explains Minall. "But don't just think about multiples. If you have a product that can be sold in bulk, you can sell it to manufacturers, you can sell it to farm shops - there are thousands and thousands of farm shops, delicatessens, and garden centers."

Be open to change: your circumstances may change during your first year, but if you can adapt to these changes and recognize the aspects of your business that aren't working, then you have a better chance of success.

"The reality is that the business you end up with will not be the one you have in your business plan," says Isaacs. "There will be something that happens, and opportunities will change, which means the business looks different."

And perhaps most importantly, "make those changes while you still have the necessary budget," says Barron.

Don't lose hope when things don't work out: there will almost certainly be aspects of the business or a particular product idea that will not be successful. But that's okay, not everything will work perfectly, and not every product will be successful.

"Don't take it personally, it happens to everyone," says Tim Davies, founder of DuelFuel. "Steve Jobs failed at Apple in the first two years and look what happened."

"It's a learning journey," agrees Busseni. "It's not about failure." But more than anything else, "enjoy the process," adds Davies. "It's not easy, but guess what, it's a great business to be in," concludes Minall. (Photo: Freepik)