Self-employment is now a strong field of earning. With the increase in the number of entrepreneurs, the market of startups is also rising at a higher rate. Startups are the initial stages of any business where the founders of the business generally invest initially to attract other investors from outside. There are a lot of successful startups, whereas most of them fail to stick to the market. This is generally because of the lack of availability in the market, or there is 0 space for the product or service.
One can get easily motivated by the success stories of startups, whereas the failure stories are mostly avoided. Research says that more than 70% of technology-based startups fail. There could be various reasons or no specific reason behind the failure of any startup, as there is an amalgamation of several justifications responsible for the failure.
Setting up or taking the initiative to start a startup is difficult, while looking for the failures makes the process more hectic. Entrepreneurs and startup founders have to be good at risk-taking factors as successful people in business always learn from their mistakes.
Many startups fail in the early stages with a business idea, but only 4 out of 20 can stick in the market race. Generally, it is not just a single factor that prevents an entrepreneur from becoming successful, but it is a combination of several reasons. Here is a list of the top 5 reasons behind the failures of most startups.
1. Not leveling up with the market demand – in entrepreneurship, there is a simple statement that States no market no cash research says that more than 40% of the hundred close companies failed because the planned product or service is not market compatible. Market research is essential before investing in any startup. Every startup founder must calculate the cost of the entire marketing process before starting a business based on the demand of the product and the targeted audience. At some point, research says that certain startups started with the product or service that the market was not yet mature enough to gulp in or feature the product or service. The core reason behind every failure state is the lack of market demand and the target audience. There are more than a hundred reasons and examples behind the failures of a startup due to lack of market demand. Hence before investing in a startup, make sure that the market requires the product or service you are selling.
2. Lack of entrepreneurship skills – a successful entrepreneur must have specific skills to stand out in the market. One must be well concentrated on the industries that require both their educational background and skills of professionalism. This increases the success rate and provides more determination into the business practice. A successful business person should be compatible enough to work with a successful team and should have the skills to sell a very strategic product to hold onto the one must while understanding the market scenarios and the demand for the product or service they will be selling. One must also be having an excellent financial solution that supports a startup in various ways. A skillful businessman needs people for team management and other things to work seamlessly. Customer service and project development are essential skills to run a successful business. Knowing your competitors and your position in the market and supporting your company inside out will lead you towards success.
3. Determining the price and cost of the product or service – one of the significant common problems and an essential factor is stating the price and cost of the product or service. For many startups, calculating the high enough price to cover the cost but not sufficient to attract customers is challenging. Research says that a company’s profit is the main reason behind its failure.
4. Lack of marketing skills – a successful entrepreneur can only hold a market with excellent marketing skills. Your product and service must create a bus in the market and its customers. If it fails to create a bus when no matter how unique your product or service is, it is bound to go down if no one knows about the product. Hence, making the product popular with seamless marketing ensures the product’s success and awareness about the product. Getting a PR team helps create a Buzz among the targeted audience, and proper advertising through social media channels and press spreads awareness about the product or service. Proper marketing increases the value of the product and helps it reach its target audience; hence the cell increases, making it a success for the company. Many people in business consider it useless and a waste of money to advertise the product. Still, advertising and popularity are a crucial part of getting your business running and helping the company to survive in the market.
5. Not Prioritizing the customer’s needs – a service or product only becomes successful when the customer and the target audience are satisfied with the result. Hence customer satisfaction is a vital area to overcome failure in the business. Launching a product and receiving customers’ feedback conveniently for any product development and testing is very important. The customers are the company’s biggest asset hence must be given much attention and importance. Companies trust creates a bridge between the customer and the product that increases the demand and keeps the product popular among the market. Ignoring the customers’ needs and feedback can result in a startup failure.
Conclusion
In startups, avoiding the above-listed mistakes is inevitable, but a responsible team, hard work, and putting enough time towards a business can ensure success. Startups generally fail when they fail to solve a market problem; hence, gathering a team with professional skills covering every area of a startup need can make a place for your product in the market and help your products reach your targeted audience. Remember, failure is not the end but the beginning of something better.
