16/04/2022
𝐓𝐡𝐞 𝐓𝐨𝐩 𝟕 𝐑𝐞𝐚𝐬𝐨𝐧𝐬 𝐖𝐡𝐲 𝐌𝐚𝐧𝐲 𝐒𝐭𝐚𝐫𝐭𝐮𝐩𝐬 𝐅𝐚𝐢𝐥: 𝐀 𝐂𝐨𝐦𝐩𝐫𝐞𝐡𝐞𝐧𝐬𝐢𝐯𝐞 𝐆𝐮𝐢𝐝𝐞.
Nowadays many people want to start their startups. But they failed midway.
Do you want to know why they failed? Let's look at some research. According to Small Business Administration research, only half of new businesses survive for the first five years and only one-third of new businesses can survive for 10 years. The inverse is compelling as we can conclude that if only 50% of new businesses survive for the first five years, then the other 50% fail in the first five years. We can also conclude that about 65% of new businesses don’t make it to the ten-year mark.
According to research from Bloomberg, Forbes reports that eight out of ten businesses fail within the first eighteen months. What are the reasons businesses fail to thrive, given a 50/50 chance of survival and assuming a product or service for which there’s a demand?
𝟏/ 𝐋𝐚𝐜𝐤 𝐨𝐟 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲 𝐚𝐧𝐝 𝐛𝐚𝐝 𝐩𝐥𝐚𝐧𝐧𝐢𝐧𝐠
"Planning is essential for any business – if you don't plan, you're planning to fail." This quote is cheesy but true. For a business to be successful, it's important to plan long-term. This includes conducting market research to understand who your customers are and what they need, as well as being proactive about trends so you don't get left behind. Just look at the many brick-and-mortar retailers that didn't adapt quickly enough to changing customer shopping habits and are now struggling or have gone under.
𝟐/𝐑𝐚𝐩𝐢𝐝 𝐆𝐫𝐨𝐰𝐭𝐡 𝐚𝐧𝐝 𝐎𝐯𝐞𝐫-𝐞𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧
Now and then, businesses experience sudden growth or decline. If you can't handle the growth, your website will be filled with orders you can't fill. Alternatively, if you're too confident in your product, you might invest too much in inventory and not be able to sell it. Both of these lead to business failure.
𝟑/𝐖𝐞𝐚𝐤 𝐥𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩
A good leader recognizes their limitations and employs, outsources, or seeks professional advice to fill in the gaps. They will also communicate, direct, reward, and offer opportunities for personal growth to their employees, creating a happy, effective, and loyal team. On the other hand, poor leadership leads to demotivated and ineffective teams, which can cripple a business.
𝟒/𝐋𝐚𝐜𝐤𝐢𝐧𝐠 𝐭𝐨 𝐓𝐨𝐮𝐜𝐡 𝐰𝐢𝐭𝐡 𝐂𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐍𝐞𝐞𝐝𝐬.
It is important to stay in touch with your customers and understand what they need and the feedback they offer to maintain a successful business. Your customers may like your product or service, but they would love it if you changed this feature or altered that procedure. What are they telling you? Have you been listening? If not, you could be offering a product or service that has fallen well below trend.
𝟓/𝐋𝐚𝐜𝐤 𝐨𝐟 𝐧𝐨𝐭 𝐨𝐧𝐥𝐲 𝐮𝐧𝐢𝐪𝐮𝐞𝐧𝐞𝐬𝐬 𝐛𝐮𝐭 𝐚𝐥𝐬𝐨 𝐯𝐚𝐥𝐮𝐞
There are a few likely explanations for why a business might be failing, even though it has a product or service for which there is strong demand. One possibility is that the business has a mediocre approach and is not distinguishing itself from its competitors. Another reason may be that the business does not have a strong value proposition, and therefore is not offering enough value to consumers.
𝟔/𝐎𝐯𝐞𝐫𝐝𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐜𝐞 𝐨𝐧 𝐚 𝐟𝐞𝐰 𝐛𝐢𝐠 𝐜𝐮𝐬𝐭𝐨𝐦𝐞𝐫𝐬
In a startup, it's a risk of relying on a few big customers. Ways to do this are to increase the customer base, diversify the product portfolio, and encourage customers to sign contracts with a reasonable notice period.
𝟕/𝐏𝐨𝐨𝐫 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭
You must know, down to the last dime, where the money in your business is coming from and where it’s going for your business to succeed. In business, it is important for businesses to know their financial situation, to avoid failure. It mentions that some people start businesses without any knowledge about financial management, which can lead to disaster.
𝐀𝐮𝐭𝐡𝐨𝐫- Ideawind
