Starting your own business is always a daunting process. Risks are high, experience if often minimal, and everything is on the line. Nine out of ten startups businesses fail. The worst part is that a lot of these failures are easily preventable. So before you risk it all, take some advice from the pros and ensure that you are apart of that 10% that succeed. Here are the top 4 reasons that attribute to failure if done poorly, and that attribute to success if done correctly.
- There is no market for the product.
- The company runs out of cash or investments.
- Company doesn’t have the right team.
- Lack of planning/business model.
More often than not, the number one reason that businesses fail is that their target market is not there. In other words, the customers that the business is depending on buying the product doesn’t want or need it. This creates a huge problem and will often set companies back or completely plummet them.
Starting a company is always more expensive than planned. You should speak with a business financial adviser for advice on how much you realistically need to start. If you get halfway through and run out of money the all the time and money you invested up to that point is gone. If you are funding your startup through investors then make sure to not promise unrealistic guarantees of when they will get their money back. The stress of unhappy investors, while you are trying to get your business up and running might just be the thing to push you over the edge.
The team is often the most underinvested major asset that startups have. Because there are so many other operational and development aspects of a company, the team who runs it is often overlooked. In the beginning, you just “take what you can get” because you just need some help at that point. You have to sell your company, your idea, and yourself to potential employees before your product is even on the market. It can be hard sometimes to find people with the same passion for your idea. But even if it’s hard at the beginning it gets easier as you grow, so always take a look at your team throughout the process to make sure they are the best people to help your business succeed.
People often get the idea in their head that starting a business is easy, that you don’t really need prior experience or knowledge, that you just have to be passionate about the product. Yet many, many people’s startups have failed for this very reason. You don’t have to have professional experience to succeed, but if you have little to no experience you probably want to hire someone that can help you check all of the boxes that you need to in order to be successful. Many startups fail simply because they didn’t hire a lawyer and broke a couple laws they were unaware of and the fees put them out of business. These failures are very preventable, so give your startup a winning chance and make sure you have a solid business plan and you know where you are going.