Due to a lack of experience, many startups suffer the misfortune of failure. According to me, the main cause of why startups fail might be that it’s not desirable to people and several other factors as well. Given below are most common mistakes that the startups make:
# Lack of fund
Not having sufficient amount of money in hand might turn out to be a misfortune for the startups and can be one of the reasons as to why startups fail. The startup must ensure that it has a suitable quantity of funds required for further functioning of the company. If it’s a successful startup one must surely be profiting from it but if it fails or has some drawbacks in any of its services or quality of the products or a new feature needs to be installed, that would require money.
Another mistake that startups make is continuing with the company even if it doesn’t have the money to even aid their own expenses. Hence, funds play a very important role when it comes to startups, without funds a company might not be able to progress or deal with the difficulties that lay ahead once a startup comes into functioning.
# Backup Plan
A common mistake that might be the cause of why startups fail around the world is not having a backup plan. Launching a startup is a huge step, the entrepreneur should have a backup plan for its company, and if the startup fails they should be prepared for the consequences lying ahead. If the startup is not able to yield profits as desired by the entrepreneur they should be prepared with an alternative plan to save the startup which has been made with so much of efforts and hard work.
Events can have positive impact, negative impact, or both, the entrepreneur should be prepared for all. Some of your creative genius must be put toward a business plan that forecasts and sets goals for growth and success.
Startups prosper in some places and not others. Hence, the startups must be set up at the right location, considering the cost and the geo-position of potential customers and the industry as a whole. A bad location can hamper a startups progress . As we have seen that many successful tech companies have emerged from tech hubs like Silicon Valley, Seattle, and Boston.
A startup should be clear about the section of audience that its product is targeting; it must be beneficial and something required by the people. Products that do not attract any particular section of audience prove out to be a loss for the company. Fortune reported the “top reason” that startups fail: “They make products no one wants.”
A careful survey of failed startups determined that 42% of them identified the “lack of a market need for their product” as the single biggest reason for their failure. Therefore picking a bigger market will give you the chance to grab a slice of the pie even if your company remains a smaller player.
# Single Owner
More the work, more are the people required. Indeed establishing a company is hard work and it often takes more than a single individual to launch a business. There are highs and lows, many tasks that can’t be undertaken alone. Crushing blows and circumstances sometimes make it hard to continue on without any other person’s encouragement. Then there’s a need to market the plan and build the product or service. There is a need to raise money for the startup .
In most situations, it’s frightening to tackle all this alone. A little help from friends and professional colleagues can help in launching the startup. I’ve also noticed that startups with co-founders have a higher success rate than companies with a single founder. Having a co-founder creates a partnership. There’s much more sustainability, which helps you to avoid some of the pitfalls of a single charismatic leader. Plus, a co-founder will have skills that you don’t have.
Marketing comes in many forms, from word of mouth referrals, to traditional advertising, to Internet advertising. The marketing has no fixed rules; the best type of marketing for you depends on the type of business and your target audience. Hence it’s a mistake to assume that you don’t need marketing and that will somehow lead to be the reason why startups fail.
So, these were some of the reasons why startups fail. Just like above, other factors include: lack of investors, lack of proper advertising and promotion of the startup, not wanting to take risks or compromising with the quality of products, neglecting pricing strategy, not giving customers feedback’s importance. This is not a complete list of the causes of failure, just those you can control. There are also several you can’t, notably ineptitude and bad luck and can be the reason of why startups fail. Therefore begin with what you are good at, explore new channels, experiment, and your startup is good to go.
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