Why Many Startups Fail
Oct
15
Written by:
10/15/2009 10:47 AM
Why Many Startups Fail
According recent statistics from the Small Business Administration (SBA) 90% of the small businesses fail within two years of starting due to many entrepreneurs lacking basic knowledge in handling company operations. Let’s explore the reasons why businesses fail and how you can avoid such a failure?
Starting a Business for the Wrong Reasons:
Many times Entrepreneurs start a business on the hope that they can quickly make money or have more free time with their families. A startup created for such a reason will have more chances to fail. Companies based on activities the entrepreneur loves to do and is passionate about often are more successful.
A Lack of Planning:
Most new businesses fail because of deficient planning. Careful planning focused on the industry is quite important for any startup to become successful. At times Entrepreneurs do not have a proper vision for their corporation and disregard the need of a healthy developed business plan. Be sure the product or service you are providing fulfills a need for your customers.
Inadequate Funding:
Another common reason for which startups fall short is underestimating the quantity of money they will need for their operation. Due to which, there is always a hazard to company strength and growth. Entrepreneurs should perform meticulous research on how much money they will need, including a range of expenses and the time it will take to create the business. You need to find unfailing investors who are consistent and can invest swiftly.
Good Location:
A high-quality Location plays a vital role in making a business successful and dreadful location can harm your business without difficulty. Factors like where your customers are located, location of your competitors, ease of access, traffic, etc. are required to consider in finding an appropriate location of your company.
Unreliable Employees:
Dependable employees are extremely important for the success of a business. A company should have employees with precise skills for the given field. A large amount of uncreative employees’ increases expenses whereas fewer employees then the workload requires, can be overpowering and tricky to handle. Hence, an entrepreneur should have appropriate facts to direct the work force.
Poor Marketing Strategy:
You cannot produce revenue when your customers are not aware of your products or services. You should have a successful marketing approach which entirely focuses on your target audience and tells them about your organization. Many startups fail because they do not promote themselves or do not promote to their target audience.
Overexpansion:
Most business owners get perplexed when it comes to the extension of their business. They want to expand very swiftly which leads them to situations like deficient capital and insolvency. A business should be extended once your company has a rock-solid client foundation.
Gagandeep Singh is working as an Internet Marketing Executive for Fortepromo, which provides high quality promotional products to help companies in promoting their brand.
18 comment(s) so far...
Re: Why Many Startups Fail
absolutely agree with everything you've said here, but sometimes it's just a case of mistiming, you may have an excellent product/service but perhaps people just don't want it right now.
competitor analysis is also key, if you can undercut the competition then you're onto a winner.
By MMSmiraclemineralsolutions on
10/15/2009 2:35 PM
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Re: Why Many Startups Fail
Nice writeup. Start ups are a waste of time JMHO due to the high failure rate.
By finance news on
10/15/2009 8:36 PM
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Re: Why Many Startups Fail
Nice post, i think competition is a big issue with starting a new company.
By Hypotheken vergelijken on
10/16/2009 10:22 AM
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Re: Why Many Startups Fail
Right on point I think its important to do as much study whenever you start a business and always make sure you have a fall back, cause in starting a business nothing it sure you have to take that risk.
By Austin Divorce Attorney on
10/16/2009 1:54 PM
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Re: Why Many Startups Fail
Well, I started a business with no money, but I analyzed a few months for a place that has no big competition. I think this is the secret!
By House payment calculator on
10/17/2009 4:52 AM
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Re: Why Many Startups Fail
I know quite a few people who have attempted to start their own businesses and failed, and I believe that in every instance failure has been attributable to one of the points in your article. Thanks for the great article; it provides a great resource for those starting out to know what they need to plan for.
By Nate Kragness on
10/19/2009 12:22 AM
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Re: Why Many Startups Fail
I am agree with idea that why Many Startups Fail because of Mismanagment
By Web Solutions on
10/26/2009 2:28 AM
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Re: Why Many Startups Fail
It is really important to start a business with determination, proper funding, and most of all proper planning is highly recommended.
By hydrofloss irrigator on
10/27/2009 9:36 AM
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Re: Why Many Startups Fail
Afterwards I realized it could be helpful to look at the problem from this direction. If you have a list of all the things you shouldn't do, you can turn that into a recipe for succeeding just by negating. And this form of list may be more useful in practice. It's easier to catch yourself doing something you shouldn't than always to remember to do something you should.
By prestito on
11/6/2009 7:19 AM
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Re: Why Many Startups Fail
I agree completely. There are so many opportunities to succeed, however there are just as many opportunities to fail. Glad I came acroos your blog. Very useful information. Thanks for sharing.
By College Grants on
11/9/2009 5:17 PM
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Re: Why Many Startups Fail
I think the biggest thing is lack of real planning.
By Fat Burning Furnace Review on
11/10/2009 2:48 PM
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Agenzia web marketing
Thanks for sharing this powerful information.That's very helpful and interesting.
By Agenzia Web Marketing on
11/18/2009 4:13 AM
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Re: Why Many Startups Fail
i think effective and efficient planning is the main thing. of all the factors you have mentioned above, i have seen start ups who had all those things but they still failed to stay in the market..
By Free professional resume help on
11/25/2009 1:39 AM
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Re: Why Many Startups Fail
A well planned feasibility study is what one need to start business, because if you don't do that you'll just waste your time and money.
By Affordable SEO Services on
11/27/2009 11:34 AM
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Re: Why Many Startups Fail
If you are not planned anything then most of the chance that your business is failed so it is really important to start a business with determination, proper funding, and most of all proper planning is highly recommended.
By Online advertisement on
11/30/2009 9:04 AM
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Re: Why Many Startups Fail
I was just thinking about Why Many Startups Fail and you've really helped out. Thanks!
By traslochi a milano on
12/9/2009 12:22 AM
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Re: Why Many Startups Fail
I agree with most of the points cited in this article. I have personally experienced this due to a combination of factors (stated above) that befell my business. It was a good but painful learning experience.
By Eugene on
3/15/2010 1:12 PM
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Mr
the keys to any good startup are vision, planning and of course backing. the last being really the most important.
By Jacksonville SEO on
4/16/2010 12:38 AM
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