It’s a great time to be an entrepreneur. Today, a new company is started every minute with over 580,000 new registrations in 2014 alone, with many of those in the technology sector. There seems to be a real buzz to Britain’s startup culture, with the boom in entrepreneurial growth making headlines across the media.
But why do some at this stage of growth flourish, while others perish?
The underpinning infrastructure can be a key contributor to whether a micro business sinks or swims. With a long list of responsibilities, it’s easy for support systems such as IT infrastructure to be overlooked by busy entrepreneurs, yet the cost of doing so can be fatal to a startup.
The entrepreneur’s to-do list
Despite Britain’s impressive entrepreneurial spirit, half of all small businesses will fail within five years. It may be tempting to point the finger solely at the tax system or the small business lending landscape, but there’s a range of factors involved, including underestimating the value of outsourcing business processes at an early stage.
For many, handing the responsibility of IT over to specialists could prove to be a shrewd investment. Not every entrepreneur will be an IT expert, and hiring one may be prohibitively expensive for many startups, yet issues around IT security and performance can have a critical impact on a business. Its no wonder many small businesses are increasingly looking to outsource some, if not all of, their IT processes.
The security challenge
Security has forced its way to the top of the agenda for many businesses, following a string of high-profile breaches over the past year. Entrepreneurs could be forgiven for assuming that being “one of many” startups dilutes the threat, but this isn’t always the case. Over 30,000 websites are attacked every single day, causing as much as £115,000 worth of damage to a business. This may be an inconvenience for large companies but for startups, it could be the end of the road.
The anti-corporate environment can also threaten a new business, where the company culture tends to be more relaxed than at a larger firm. Staff at all levels may have access to sensitive data, along with passwords and other security channels. When we consider that employees, not hackers, are an organisation’s biggest security risk, this laissez-faire approach needs to be addressed in some areas of the business.
Finding the right partner
There is a wide range of services available to startups in the UK, which can significantly reduce the administrative and security burdens growing businesses face. Outsourcing IT can be as straightforward as moving email across to Software-as-a-Service (SaaS) platforms such as Google Apps or Office365. There are plenty of cloud-based services accessible to small businesses.
Notably, some suppliers can act in partnership with startups, providing technical and financial advice. The value of this type of partnership shouldn’t be overlooked, as it can help entrepreneurs to identify and implement the right IT services without the pressure of additional products they don’t need. IT can be a remarkably complicated landscape, so it’s vital entrepreneurs can call on expert support.
The value of outsourcing
Entrepreneurs will face a huge list of obstacles as their startup grows, without the resources and budgets of larger businesses. As a result, managing systems such as the underlying IT framework is left to business leaders, who would otherwise concentrate on growing the business. This may be sufficient to begin with, but a small team with little technical expertise will struggle to sufficiently address a major security breach, for example.
Outsourcing IT services should be top of the agenda for entrepreneurs. Drawing on the expertise of specialists that understand the IT industry can help streamline business processes and drive efficiency, ultimately reducing expenditure, leaving more time and money for growing.
Daniel Beazer is senior consulting analyst at Peer 1 Hosting.
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