The reasons for the failure of startups are uncanny. Gone are the days when there used to be a single producer and distributor of goods who enjoyed complete monopoly. Nowadays, having a good business model, best of personnel, funds, investors, target audience, compatible co-founder, advertisement, passion and even luck is not sufficient sometimes. Numerous factors that can lead to failure of business are as follows:
Sometimes there is demand for services or products that you are willing to provide but not at a specific location. Sometimes there are already too many suppliers that no matter how good your business model is, it just won’t work in a particular location and might do great somewhere else. Being sure of where you are operating your business is utmost important.
2. Lack of Financing
Sometimes due to political differences or change/lack of interests finding investor at the second stage of funding becomes tougher, and eventually the business loses its customer base due to lack of funding.
3. Not Pivoting away
Knowing that some strategy won’t work but still not being able to do anything about it due to lack of back up is just like marrying a bad idea and being with it for the next 7 lives.
4. Lack of coordination
Having the best of teams is one thing and extracting the best out of some team is another. Sometimes due to lack of trust and coordination, things don’t work out the way we want them to.
5. Not having a target market
The product is excellent, the services are marvelous, direction is superb, implementation is un-matchable, but there is no demand. Be sure of the audience that you are targeting. Make sure they want what you are producing because no matter how good your product is, if it provides no utility, it is of no use to anyone.
6. Take care of the competition
It is very tough to survive in an over competitive environment. When two or more businesses run on the same grounds, often it happens that one of them ends up losing its consumers to its competitor. Make sure that you don’t end up like that. For that, you might even have to cut down on your cost or bear temporary losses but giving up should never be an option.
7. Lack of Marketing
In a world of social media marketing, if you fail to market your product well, the odds are against you. Make more and more people aware of what business you are initiating. Expand your network, take your investors in confidence and promote your product well.
8. Losing focus and not taking consumer feedback
Your focus is the benefit of your consumers. In the long run, if you forget to take their feedback and stay inflexible and adamant, things might take an unfortunate and opposite turn.
Keeping the above-mentioned points in mind and learning from your fellow entrepreneur’s mistakes you can do wonders. Learning is an ever going process, always be prepared for the worst but always hope for the best.Opinions expressed here by Contributors are their own.