Six mistakes to avoid when starting a business

Around 60% of new businesses fail within three years, says David Prosser. Here, he outlines six key pitfalls to avoid when starting a business.

Woman giving a business presentation
Managing a team is a different skill to setting up a business
(Image credit: © Getty Images)

New business launches are soaring despite the tough economic backdrop. Companies House says 402,000 new businesses were registered in the first half of 2022: more than 90 start-ups were founded every hour between January and June.

Still, while the total marks an 18% year-on-year increase, how many of them will succeed? Around 20% of businesses fail during their first year – and 60% disappear within three years of launch. Those percentages may be even higher in future owing to soaring inflation and slowing growth.

However, forewarned is forearmed. Business advisers point to several common mistakes to avoid when starting a business. By cutting out those errors from the start, you will give your new venture a better chance of success.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.