Why do most startups companies fail?

startupAt this time, there are lots of startup companies in the market. Some of them grew very fast and got success as well but there are also some startup companies which didn’t get appropriate success and failed in the business. There are many positive things about startup but several of startups fail in the 1st three years. It is not easy to get success easily because it requires a lot of strategies, efforts, knowledge, skills, and many other things. There is no doubt, many of these businesses were well planned but lacked the fundamentals for getting started. It is essential for startup companies to avoid failure mistakes and start their business appropriately. The following are some mistakes that done by most of the startup companies but you should avoid if you are planning to launch a new startup.

  1. Lack of Focus: It is a major reason behind the failure of most of the startup companies. There are several people who start a company but don’t concentration on their work. So, it is very necessary to focus on work properly to get success.
  2. Business Model Failure: Business model is one of the most general causes of stoppage in the startup world. Most of the entrepreneurs are too positive about how simple it will be to get customers. There are huge numbers of entrepreneurs who failed due to not giving sufficient attention to figure out the practical cost of customer achievement. It must be practical and based on exact, present information and well-informed projections for the prospect.
  3. Poor Management Team: Poor management team is a common problem that is the reason behind startups fail. There is no doubt; a good management team will be smart and better to resolve problems. The weak management teams make mistakes in several areas like lack of motivation, passion and more. So, need to prepare a team of good and professional people. A successful administrator also is an excellent leader who makes work ambiance that enhances productivity.
  4. Running out of Cash: Most startups fail because they run out of the cash. It is vital to understand when you run startup company how much cash is required, how much cash is left. Thus, a company will get certain key milestones when you evaluate your funds. When you have a feasible business model then should manage your cash flow is an essential thing that you need to do.
  5. Not Understand the Market Competition: It is also the most important factor behind the failure. New entrepreneur didn’t analysis the competition of the market. If you don’t validate your market competition, you can’t make a good product. Hence, it is advisable to focus on the market. If you concentrate on the market then you are able to analysis the market competition. It is the essential key to success.
  6. No good Mentorship: It is always excellent to have an adviser for your startup. If you do things alone then there are more chances to make the mistake that may guide you to failure. A good mentor can lead you in your everyday decisions to keep you away from falling.
  7. Not Capable To Make Decisions: Some of the founders are not able to make the decision in right way. Therefore, an entrepreneur must always be clear about his idea or have the proper visualization for his startup. It helps to make quick and well-organized decisions in the critical time.

Moreover, a business startup is a risk but it always gives the innovative opportunity as well.  It is very important for all startup companies to do proper things, right strategy; good planning that is superb for their business.

Pappu Jaiswal

Author: Pappu Jaiswal

Pappu Jaiswal is the co-founder of 7eyetechnologies, an India based IT Company that provides services Web Development, Designing and online marketing. Pappu also blogs about entrepreneurship, social media and business technology.

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