Owning a startup is good and challenging. Maintaining a startup is more challenging. Many new start-ups are successful but about 50 percent of them fail and only about a third of them survive 10 years or more. What are the main reasons why startups fail? At the end of the day, it is usually not a start-up venture; is a businessman who fails his start-up. Almost all the companies have common reasons for their failure even before they start operations. Here are 5 common mistakes we have seen with the founders of the startups.
Take a long time to launch the product
When you launch the product, time is everything. Although certain circumstances are out of control (such as economic or natural disasters), timely implementation can be planned. Ignore the full scientific method. Just make sure the company does not start early or wait too long. After all, there is nothing wrong with chasing a start to the market to win the competition or start making money. Make sure the startup is ready to go before you can make it public. Do not wait too long. Otherwise, there is a chance that all the money will run out or the competitor will be the first to market the product. Make sure everything is ready but do not procrastinate.
Estimate the amount of money they need
New companies often fail as their financial needs exceed their expectations. Make appropriate estimates of your financial needs by looking at all the variables. That is why it is so important for a business owner to understand the financial requirements needed to keep his business running. Without knowing this information, you will be wondering why your business bank account is negative every month. You should list all your expenses associated with starting and running your business.
They are not prepared to fail
For small businesses, expect – it is normal. If you are nervous, you may be more cautious and more likely to fail. Failure is an excellent teacher so be a student of your failures and learn to do them differently in the future. Success is not built on success. It is built on failure. It is built on frustration. Sometimes it is built on the disaster. Some of the most successful businesses faced disaster and the resulting pivot was a push to the right place. Failure is an excellent teacher so be a student of your failures and learn to do them differently in the future.
Do not research for their competition
Even if your product is set to reshape the marketplace and you do not have existing competitors, there is still a gap between your business and indirect competitors. Maybe you both have a website, maybe an app. Learn from the successes and failures of others too. At last, your situation is different, so start by getting to know your business internally; that way you will know that a little competitor’s knowledge will be helpful or a hindrance. This is true if the market is already crowded.
Ignore legal protections
The main goal of any startup is to increase your profits. While doing so, they often overlook the necessary legal requirements that may jeopardize their business over time. Compliance is an important wheel that keeps a check on any ongoing business needs. Once you have established a company, you cannot ignore the safety rules regarding the sale or transfer of stock to family, friends and/or angelic investors. Invest in planning and obtaining professional advice now to avoid major problems later.
Avoid making rookie mistakes
Your business plan needs to cover the entire process, from your management team to your marketing strategy. This helps to determine if you have the right investment plan for you. You cannot tell a bank that you plan to make $ 100k in your first year of business but you do not have a marketing and sales plan. What you want to achieve is not realistic unless these two strategies are in place. Even if you do not want to get a bank loan, you will still need to create a business plan that guides your actions.
Some businesses start immediately, but others take longer to gain strength. If you stop too soon, you may miss the one that lasts a little longer. Do not start a business until you can give it the time it needs to succeed.