Common Start-Up Mistakes
Common Start-Up Mistakes
What assistance does a BCBA need to launch an Applied Behavior Analysis (ABA) practice? While ABA has proven itself to be a necessary offering in the healthcare industry, a company still needs more than a demand for services to succeed. In this article, we share research conducted by CBInsights on over 100 organizations about the twenty most common reasons that start-up companies failed. We then show how Hi-5 ABA can offer solutions to help mitigate those pitfalls.
CBInsight’s Start-Up Post-Mortems
CBInsights investigated over a hundred start-up failures. They found that there was no single cause for failure, but instead that several errors compounded. The following is a list of the top 20 reasons they found that cause a company to fail:
- No market need – 42%
- Ran out of cash – 29%
- Wrong team – 23%
- Outcompeted – 19%
- Pricing or cost issues – 18%
- Unfriendly user-product – 17%
- Product without a business model – 17%
- Poor marketing – 14%
- Ignored customers – 14%
- Mistimed product- 13%
- Lost focus – 13%
- Disharmony among the team and/or investors – 13%
- Pivot went badly – 10%
- Lack of passion – 9%
- Failed geographical expansion – 9%
- No financing or investor interest – 8%
- Legal challenges – 8%
- Didn’t use network – 8%
- Burned out – 8%
- Failure to pivot – 7%
Market Demand
A strong clinician in a prospering industry mitigates a couple of the above list of concerns. For example, while 42% of companies fail due to lack of market need, demand for ABA is enormous, given that 1-in-59 children are diagnosed with autism and the industry is years away from producing enough providers to meet the need. ABA providers who venture into business for themselves enjoy an industry demand-advantage over most other start-ups. Even though eight-out-of-ten entrepreneurs who start a business fail within the first 18 months (forbes.com), healthcare and social assistance companies have the highest survival rates (BLS.gov). Another BLS study emphasizes that healthcare has the highest growth of any industry at 2.3% (lendingtree.com).
Financial Considerations for ABA Start-Ups–Franchising with Hi-5 ABA
It takes significant financial resources to fund a team. A lack-of-finances problem contributes to 55% of company failures–29% run out of cash, 18% encounter cost issues, and 8% cannot find credit.
Hi-5 ABA substantially remedies the capitalization challenge. First, instead of going to family, friends, banks, or angel funds for loans to sustain the business, Hi-5 ABA advances against unpaid claims so that the franchisee’s payroll gets covered by Hi-5 ABA. Second, Hi-5 ABA doesn’t get paid until the franchisee gets paid. So the franchisee has an experienced team investing its efforts before the franchisee generates any revenue. Working capital is vital for every business–especially a start-up–but Hi-5 ABA protects and provides for its franchisees.
ABA Start-Up Teamwork
The CBInsights study linked above showed 36% of start-up closures occurred due to mediocre team coordination—23% from the wrong team and 13% from disharmony. The “right team” means honest, knowledgeable, and dependable personnel who function well together and possess balanced and comprehensive expertise. Hi-5 ABA prioritizes teamwork internally and in combination with each franchisee from the beginning. Even before joining Hi-5 ABA, each prospective franchisee is invited to speak with various members of the Hi-5 ABA staff to get answers to questions and a picture and feel for what it’s like to work together.
Even the most entrepreneurial BCBA, who already has tremendous business aptitude and experience, will shortchange her effectiveness as a clinician if she tries to “do it all” herself. Business is a team sport–especially a business as complex as an ABA practice. A BCBA who wants a clinical career maximizes her productivity and hastens the healthy development of her practice if she can concentrate upon the clinical side while trusting a competent administrative team to manage the business side. Whether she finds that team already intact, or builds it herself over the course of time, she needs a team. “The team,” together with a proven systematic approach to the business, is the fundamental reason that any franchisor–and subsequently its franchisees–has success. And that relationship with a franchisor is why franchisees enjoy a much higher success rate than the average start-up.
Hi-5 ABA offers much more than just help with credentialing, claims, payroll, accounting, advertising, networking, guidance, research, information, and collections. Hi-5 ABA’s expert team supports new BCBAs and franchisees where they may otherwise lack experience. With Hi-5 ABA, the franchisee enjoys the manifold benefits of a seasoned group of devoted professionals who, from the beginning and all along the way, work together with you hand-in-hand to put your company on the map and to realize high prospects for success.
BCBA Burnout
Trying to do it all readily leads to burnout, which contributes to 8% of closures. Working with families in their homes is stressful. Compartmentalizing the anxiety can be challenging. People need rest. Limiting the number of areas requiring urgent daily focus and attention substantially improves productivity and job satisfaction.
Recreation also helps. See Hi-5 ABA’s website or Facebook page to catch up on Hi-5 ABA events. For example, in 2019, Hi-5 offered a free 7-day Caribbean cruise to all affiliated BCBAs. The company cares about the emotional well-being of franchisees, empathizing and helping wherever possible to handle the stresses of building a business.
Hi-5 ABA is devoted to helping BCBAs build and own their own practices–to catalyze the process required to make it happen for the BCBA who wants the freedom and long-term self-determination that entrepreneurship can create. We’re learning alongside our franchisees everyday how we can provide more and better resources to make you successful.
If you’re interested in learning more about becoming a Hi-5 ABA franchisee, give us a call or send us an email. We look forward to hearing from you.
