SEE 10 REASONS WHY START-UPS FAIL
Failure or loss is bound to happen sooner or later for every Start-ups but there are steps that can be taken to avoid almost all pitfalls coming your way even before it gets to you.
In life, entrepreneurs, especially those just starting out should know businesses succeed as much as they fail. Statistics also suggests that the failure rate for new start-ups within the first five years is as high as 50 percent. But this shouldn’t scare us. Instead, it should make us prepare well for whatever is to come.
As success is pursued, we are avoiding failure; and whenever we fail, we elude success. Success and failure are goes hand in hand. This relationship is important and must not be ignored. We should have the principle of focusing on the positive (i.e. vision, mission, goals, etc.) as a means to develop the best possible attitude to move forward on a daily basis. However At the same time, it is impossible to achieve and sustain success if we are not aware of the most common pitfalls that make businesses fail so we can consciously avoid them.
No written plan for your Start-ups:
People believe writing a business plan isn’t worth the effort. The idea of writing down a plan is the best way to make sure you actually understand how to transform your idea into a business. It makes the idea you fantasize about feasible and helps solve unforeseen problems.
It’s easy for entrepreneurs to become so focused, so wrapped up in their own vision, that they lose perspective. That’s actually one of the key benefits to seeking venture capital from firms that know your target market: they give you feedback and validate your strategy.
Exhausting Available Revenue:
For every founder that manages to bootstrap a start-up, there are dozens, maybe hundreds that run out of cash for any number of reasons. They don’t want to give up a piece of the pie, they don’t budget properly, they don’t plan for how long it takes to raise rounds of funding, their burn rate is too high, or some combination thereof.
Limited Research on your business opportunities:
Every good idea cannot become a blockbuster business. Even though you passionately believe that your product or service is great, and everyone needs it, doesn’t mean that everyone will purchase it. There is no substitute for market research, written by domain experts, to supplement your informal poll of friends and family.
Lack of feasibility:
Ideas and inventions are fascinating, but consumers and businesses generally buy complete products they can actually us. When young entrepreneurs have a “million dollar idea,” they should know that an idea alone is really worth nothing. It’s all about the execution. If you’re not comfortable making hard decisions and taking risks, you won’t do well in this role.
Lack of experience:
In reality, investors fund people, not ideas. They look for people with real experience in the business domain of the start-up, and people with real experience running a start-up. Any VC will tell you, a big part of what they invest in is the management team. If this is your first time around, find a partner who has “been there and done that”. To balance your passion and bring experience to the team, this is important.
Having a slick word-of-mouth marketing strategy isn’t enough to make your product or brand visible in the relentless trend of new media out there today. Even viral marketing costs real money and time. Without effective and innovative marketing across the range of media, you won’t have customers, or a business.
Bad advice from the wrong people:
With all the hype over entrepreneurship, the quantity of information has gone way up while the quality has gone way down. That means entrepreneurs are getting lots of bad advice from unqualified sources. The worst thing about it is, when they actually get good advice that conflicts with what they’ve been told, they don’t recognize it for what it is.
High number competition:
Having no competitors is bad especially for start-ups. It may mean there’s no market. But finding 10 or more with a simple Google search means your area of interest may be a crowded. Remember, sleeping giants can wake up. So, assuming Microsoft or Procter & Gamble are too big and slow for you to worry about will only increase your chances of failing.
In my experience, the most common cause of start-ups failure is the entrepreneur just gets tired, gives up and shuts down the company. Despite setbacks, many successful entrepreneurs like Steve Jobs and Thomas Edison kept slugging away on their vision until they found success. Don’t give up, Don’t give In. Every plan can be modified and re-modified and everything can get better. You just have to work towards it.