Startup means new business. Excellent creative ideas rotating in your head? Only depend on the idea, many young entrepreneurs start a business. But after passing some day, their initiative is falling down. Entrepreneurs lose their money and they feel depressed. In this way, many potential initiatives have begun to come in the beginning. Experts have searched the causes of startup failure around the world. Recently, US-based market research institute CBI Insights released a few reasons for the failure of startups.
Here are some reasons for the failure of a startup
Unnecessary in the market: Must need to research on it has demand in the market before launching business venture or startup. Think about the actual solution instead of pretending. Many people pretend to be an interesting solution without demanding the market. Usually, startups fail to market in 42 percent of the cases.
Money end means all ended: Many people jumped with startup while having cash in hand. But whenever the cash was started to decrease, the initiative started falling down. Experts have blamed the lack of proper use of cash as the second main reason for the failure of any startup. For the failure of a startup in 29 percent, it is blamed for not spending money properly.
Lack of right team: Another reason for the startup failure is that, unable to make the proper team. 23 percent of the reasons for the failure of the business is the lack of combination correct team. A startup will not succeed if there are not experienced member and experienced teams. If the team member does not have proper coordination during an initiative, then the startup can’t survive much longer.
Not being able to compete in competition: The fourth reason for the failure of startups is that the newcomer can’t survive. If you take lightly your competitor, it will quickly surpass your startup. There is no chance for others to take lightly in the competitive market. Startups failed due to 19 percent of the cases.
Price issue: According to the CBI Insight, the fifth issue of the failure due to startups failure is the price issue. It is important to determine the exact price for a product or service created by a startup. Too much or too little price may cause losses for startups. 18 percent of cases startup failure because of it.
Not a friendly-product: The product or service created by startup must be of course useful. Otherwise, it is difficult to start the startup. Startup failed due to not being a useful product for 17 percent of the cases. While creating the product, must need to keep in mind that it’s only for the customer. Remember, the buyer is the king.
Inappropriate business model: 17 percent is responsible for the failure of startups, without being the right business model. Just do not have a model of business, whether it is sustainable or not, it is important.
Poor marketing: It is said that creating products and services is not enough, they must know the proper marketing techniques. Many startups failed due to lack of proper marketing. In the 14 percent of cases, the failure of any enterprise is to blame poor marketing. Understanding a business customer and their attraction strategy is important for success.
Do not evaluate customer feedback: 14 percent of cases are not considered to be the reason for the failure of the customer’s response. The quality of the services will be increased according to the needs of the customer about what they are saying about your product or service. Change the product type or service will be made according to customer feedback. Only then will the success come. Otherwise, the initiative will fail at the beginning.
Deliver product in the off-season: When the goods are in demand, then deliver the product. Business benefits will come when you can understand the right time to deliver a product. No hurry or too late. The tenth reason for the failure of a venture is considering to deliver products in wrong time.
Lack of goal or aim: Another reason for the startup or failure of the enterprise is that it has no specific focus or aim. Don’t aberrant from your main goal. Analysts blame the lack of a target for startup failure in 13 percent.
Controversy with the co-founders: In the beginning of a startup fight with investor or co-founders, the start-up will fall down. 13 percent startups fail for controversy with the investor. To make the startup successful, it will be good to have a compromise between themselves. Must be transparent.
Wrong leadership: In many cases, due to wrong leadership, the initiative may fail. Wrong leaders are responsible for the failure of the enterprise in 10 percent of the cases. If you need to succeed in the initiative, you will have to think about the changes.
Lack of Emotion and Skills: According to a survey conducted by CBI Insight, the 14th reason for the failure of the startups is found to be the motivation and skill of entrepreneur. As a result of the startup’s failure, 9 percent of the cases have been reported.
Location: Where is the startup or initiative was taken, the place is also important for success. With the delivery of products or services, startup positions have a big impact. Sometimes, if the venture is not in the right place, it fails. The survey found that 9 percent of the cases are due to the bad position for startup failure. Make your location easy for your customer.
References: Gadgets Now