Every year hundreds of thousands of startups take root but usually every 8 out of 10 of those either collapse or fail to sustain after a year. Every good financial advisor penrith will, more or less, give you the same reasons why this happens. If you’re still unsure, or looking to build a startup, here are 5 reasons you should know why 8 out of 10 startups fail – before you step into the waters;
Not enough market research
Most startups are created by fresh grads or people just out of college with little or no experience. They have all the necessary knowledge to create a startup but not enough market research to back up that knowledge. Knowing your clientele, your consumer and your targeted audience can give you a push start into the market that a lot of new startups lack.
Lack of innovative and different ideas
Let’s face it – a lot of startups come out as a result of somebody else pursuing a similar idea and succeeding and the rest of the lot jumping on the bandwagon in hopes that their startup will be at the receiving end of similar successes. Usually, that is not the case. If you lack individuality in the market and have no innovative ideas to pitch to your consumers, then sooner or later, your startup will fail. It might not happen right away, but basing your company’s foundation on zero innovation leaves no room to grow in the future.
Inability to convert
Some startups that get some success in the beginning can also fail at a later stage because of their inability to convert their little successes into a sustainable long-term business model. This usually happens due to a lack of business road map and not knowing what’s next for the startup now that they’ve got some attention. In this competitive market, one has to constantly come up with updates and new innovations to their products, which can be impossible without a plan.
Not making employees a priority
Working at a startup can be a tricky thing to do for an employee because of an aspect of instability that comes along with a new company. If startups fail to make their employees feel like they’re valued, they’re easily inclined to jump ship as soon as a hiccup occurs!
Bad leadership is one of the major reasons why startups fail to launch themselves beyond a certain level. Employees and customers altogether realize that they don’t want to associate themselves with a certain company or brand just because of who runs it, which can really put a dent in the startup’s hope to succeed!