6 tips to avoid the failure of your project in its early years

All projects that a person seeks to implement are subject to failure, even those whose owner has sufficient and important financial liquidity, for which feasibility studies have been completed on the correct scientific method. On the other hand, there are ways to reduce the possibility of this failure, especially in other years, which are high, since the project is still in its infancy.

In this article, we will discuss, first, how to reduce the rate of “collapse” of the project in its early years, which are the stages that the project owner works on before it is officially launched. Second, we will also talk about what can be done, if the idea begins to fall after its launch.

These are stages and notes that must be taken into account, in order to bypass the early years of “adventure”.

1. The role of financial facilities

Some call it a “potential savior,” and others “the banking escort,” because the bank often provides it to you, to follow up on your project and financing in the early years, and even gives you golden recommendations, that can save the collapse of your project in the first steps.

All banks now provide “financial facilities” at the beginning of the course of each project, and most Arab banks work with it, in order to ensure that their money will not be wasted in the first years at least, but it is also considered a good thing for the project owner, who must follow his advice and observations, and not ignore them. , because he often has great experience in managing the affairs of companies and institutions.

There are those who ignore the advice of this facility, just because it is sometimes harsh, or gives notes that do not appeal to the owner of the project, or that he deals with “arrogance”, but do not be surprised if I tell you, that the solution to all these problems, is “patience”, because This facility is the “safety valve” for your project in its early stages, and it can even defend your project in front of the bank, if you need additional funds to save it, especially since profit is out of reach in the early years.

It's good to listen to your assistant or friends in the field, but "companion" should come first, before anyone else. Giving value to this person, at the beginning of your business, makes him exchange the same value with you, and this helps the “business”.

2. Diversify sources of funds

If you are one of those who do not want to give importance to “financial facilities”, you must have multiple sources of funding, in order to save what can be saved, if you need money to continue your project.

Some economic analysts assert that diversifying sources of financing is necessary, even if you have a good relationship with the “banking facilities”, because the bank can turn its back on you at any time, if it sees that the project is heading towards failure, and here you can rely on other financing .

Do not resort to the “micro-credit companies” that filled the world in some Arab countries, because their financial guarantees are very large, especially at the beginning of the project. Rather, look for investors and rich personalities, who can push your project forward, in a time of distress, or you can rely on companies that are active in same field of work.

Cooperation with companies in the same field at the beginning of the road can be understood as “merger” or your company becoming a “branch” of the major company. This is not true, but the agreement can remain within the limits of "trade exchange" between two or more companies, or facilitate tasks in exchange for money.

It must be admitted that most new investors do not like this idea, because they will be forced to reveal all their plans to a “competing company”, which can be exploited later to overthrow your project, but it remains a smart idea, at least at the beginning of the journey.

3. How to carry out project studies

It is the first stage that must be passed through, during which the owner of the project passes through many stages, but most investors, ignoring some of its main points, so that the start is wrong and ends in failure.

The stages of the “project study” or “feasibility study” are many, but the interested person must ask himself many questions, before starting work, the most important of which is, “Why is this project exactly?” and “Who are the target customers?” What is the best place or area for my project?” And “How will customers be dealt with?” Then, “What new will my services provide to consumers, if my field of work is teeming with competing companies?” and “What are the failure rates of the idea?” And “Can my project be implemented on the ground, under the current economic and social conditions?” …etc.

The project’s feasibility study, considered one of the long and necessary stages, some economists call it “the study of interest”, others “the pillars of the project” and others describe it as “the heart of the project”, because in the end, it is what guides the project and determines its goals, short and long-term, then financial profits expected.

Mostly, the entrepreneur does not rely on himself at this stage, but on distinguished experts and economists, and then on owners of similar projects, who can give you very important tips and clarifications.

The “financial controller” in turn can carry out this study, but it sets specific conditions, including financial and technical, in order to start implementing the study. There are specialized companies, and they are found in all Arab countries. In completing this study, it is recommended to deal with them, since they have experts in the field, instead of relying on oneself or banks and financial institutions.

4. Study potential competitors

There are competitors in every field today, and if you choose to enter a field where there are no competitors, you can “partially” dispense with this study, while maintaining some of its key points.

Studying competitors is a very important stage. Some compare it to a “feasibility study,” or consider it an introduction to it, but most economic theories consider it a stand-alone stage that must be given great and distinct care.

Your competitors can be the first reason for the failure of your project in its early stages, especially if it turns out that they are distinguished by great strength in the market, and that they have accumulated sufficient experience and expertise in it, enabling them to monopolize it in whole or in part, for a long period of years, or that they receive aid from the state or parties.” “Aliya” is affiliated with senior officials, as is the case in some Arab countries.

All of these things make the stage of studying competitors a very important stage, which must be taken care of, but how is this study carried out?

At first, many consider that the “study of competitors” is done by knowing their income, ways to promote their goods, the amount of their sales, etc., but this remains insufficient, if you ignore the study of your competitors’ clients, as well as their nature, their areas of residence, and their desires, and some economists even recommend studying even Their family and social conditions, in order to provide a service in the future, are closer to them than those offered by competitors.

This stage comes directly after the “feasibility study” stage, and it is desirable that it be carried out by experts in this field, i.e. “statistic companies” or others interested in local figures and reports, which are provided by local institutions.

The project owner can supervise this study, but often he does not have enough information, since he will discover the “market” for the first time, and therefore the study will be incomplete or incomplete.

5. Marketing and Advertising

It is a stage that must provide it with important financial capabilities, in addition to the possibilities of establishing the company and the project, but it is also considered important, and among the sensitive stages, which plays an important role in avoiding collapse in the early years of the project.

The owners of start-up companies ignore them, because they require important financial liquidity, and because most of the companies that are entrusted with them and the collaborators, initially demand sufficient experience, to market the name of the company and the project, but if you find an institution that can promote your project at the beginning of the road, you have succeeded in a large percentage in the early stages of the project and ensured its continuity for at least five years.

Marketing and advertising are very important in all stages of projects, even advanced ones, as there is no company in the world that does not rely on advertising and media, in order to deliver its products to customers and consumers, especially if its goal is to reach customers outside the country, as companies do Export for example.

Marketing your product in the early years of your project is an urgent necessity, through which the products and services offered by your company will be properly promoted.

 6. Additional services for customers

These services are outside your field of work, that is, they do not have to be in line with the quality of services provided by your company, but they remain useful, to bring in a larger number of customers at the beginning of the road. This stage is not limited to start-up companies and projects, but even major companies that have many years of experience in the markets are now dealing with it.

McDonald's stores, for example, have finally understood this point, and have come to rely on the "delivery" service, which they have been absent for many years, so other companies have taken advantage of it and are now reaping huge financial profits from it.

In turn, it requires financial liquidity at the beginning, but its results are almost guaranteed and profitable, as it helps to win the love and sympathy of customers, and even helps you to enter strongly in competition with other companies, which work in the same field.

For example, always, by abandoning “delivery” services, “McDonald’s” has opened the way for small companies to develop, such as “Jumia Food” in Morocco, and “Tacos de Leon”, which has become more active in North African countries, not to mention “Tazej” which It also invaded Morocco and some North African countries, relying on this service at the beginning of its path, to the extent that some of them have become fierce competitors in the market, after which they have to introduce the service in their transactions.

And to win the customer, you have to surprise him with something he did not expect. Give him a “reward” for choosing your company or products. If this is the case, it will not change you at all, but rather it will be a reason to “kidnap” the customers of other companies for the benefit of your company, just as it happened to “McDonald’s”.

The risk of project failure befalls all start-up projects at the beginning of the path, but researchers and experts in this field have set important points and rules that reduce the rate of failure at the beginning of the road, but it remains possible.

Following these tips will enable you to overcome the difficult period (the first five years), which must be passed, so that your company and project will gain the necessary experience and strength for future development.