In the UK Economic Climate, Risks of Starting Up a New Business Outweigh the Benefits - Essay Example

Decreased demand has confronted the business world. This together with competitiveness presents a challenge to new businesses. Another risk is on marketing, a new business’ failure to make known of their products and services will result in failure. Another thing is about financing, the business may require continuous financing that may be unavailable. Finally, the management of a new business can either be a catalyst to failure or success. However, there are a few benefits that have encouraged startups such as government policy and availability of raw materials. It is therefore apparent that the risks that a startup business faces in Britain are far much compared to the benefits.

Firstly, the business is affected by factors within its control and reach. The management of an upcoming business can easily lead the company to failure due to many challenges that are experienced. They should have both long-term and short-term goals for the business and ensure they are implemented. Shaky management can contribute greatly to a business failure. Business owners have the capacity to find the best individuals to steer the business to success. The marketing strategy should be in place and should have a target market. A failure in this aspect will result in losses in the business hence closure. Financial management is also required when starting a new business; the available resources should be used maximally. Failure to do this will strain the business and if takes long before it breaks even, then there is a possibility of it closing down.

Other aspects are outside the business's control. These include regulations, market dynamics among other external factors. The demand for several products and services has continued to shift. Despite the increased and improved quality, new businesses, find it difficult to penetrate the market because the existing demand itself is below the supply. This is the reason why the market survey is necessary before engaging in any business. Government regulations especially those developed in the process of establishment of a business can result in closure due to the requirements of conformity.

Despite the risks that are associated with new businesses, there are benefits that they enjoy. Some government policies allow for funding as well as consultancy for startups. Government business incubation facilities offer a good starting point for startups. However, only a limited number of businesses can be supported by these facilities hence the chances of failure are available. Accessibility of raw materials also makes it possible to start a business and thrive. Read More