Starting a business can be one of the most exciting times in the entrepreneur’s life. You begin small with a great idea and put your blood, sweat, and tears into making it happen, but with no guarantee that it will be a success. The rate of businesses in Australia that fail to get past the three-year mark can be a deterrent for many when considering a new business, but how bad is it exactly?

According to the Australian Bureau of Statistics, the figures are alarmingly bleak. A massive 60 percent of businesses in this country fail within their first three years of operating, which can be quite frightening for anyone attempting to start their own small business.

With a range of reasons cited for the cessation of these businesses, including inadequate cash flow or trading losses, there are some fairly common mistakes that new business owners make which set them up for failure.

Starting with a bad idea

Many businesses are unfortunately doomed from the beginning, due to lack of foresight and poor ideas about what the company will achieve. Be realistic about your business’s goals and ask for honest feedback from friends, peers, and other professionals. The criticism may be hard to hear, but it could ultimately save you and your business a lot of wasted time and money.

Being over confident

One of the key reasons a business fails comes from an inability to ask for help. Many business owners go into their ventures with too much confidence, and neglect to enlist the help of professionals to help them achieve their goals. While it’s great to rely on free assistance, this is one area where it’s crucial to pay for advice in building your business.

Lack of capital

This is the main reason why businesses fail in their first three years, and it’s often avoidable with a solid plan in place. Without sufficient money to pay creditors or run your business, you’ll quickly find your business failing and will inherit a range of debt and other money issues even once it’s ceased trading.

Seek help from the professionals

Even with the best plans in place, small businesses can fail. To give your new Melbourne venture the very best chance at succeeding, speak to one of the friendly professionals at Hart Partners on 03 9600 3220. Our experienced team of accountants can advise you on a range of financial matters regarding your small business, and help you to weather any potential storms.