The most desirable thing for any Entrepreneur is to set and run his own business, his own company. The fascinating thing about being an entrepreneur is that you get to do what your heart really desires. You get to live your life to the fullest and at your own mercy. Life becomes fun. And to top it all, everything starts with a mere idea, an idea which is then executed in the most creative way possible. But what do you reckon, how many entrepreneurs (including the wanna be’s) will be out there? Well, the rough figure sums up to be around four hundred million. Real huge, isn’t it? Now, is it possible that all of these entrepreneurs get to be successful? Of course, not. An idea is what all of them starts with but some succeed and some come back to the point from where they started. More than ninety percent fails. But how come they fail? What went wrong? Discussed below are some reasons of startup failure.
Any entrepreneur would want a successful business. But being an entrepreneur means that you need a lot more than hard work and dedication. Consider a game of snakes and ladders. It is a game where most of the people are bitten by snakes and come falling down. However, there are a few who find them climbing the ladders also. But it is one, who gets to reach the peak without falling. Now, it is up to you where you want to go. You may get bitten, you may even get to climb few ladders but to reach the ultimate place you need something more than an idea.
Some of the reasons which lead to the startup failure are as follows:
The idea with no touch of uniqueness and creativity
Having an idea is not difficult. Especially when that idea is generated from something you love. But, remember that you are not the only one who loves a particular field. That field is ought to be an area of interest for many. So, naturally, there are going to be many ideas like yours in the market. In order to establish your company, you need to bring something different to that idea which otherwise will be a common thought. Your idea should be that creative that despite being similar to many it stands out. It should be marked with a uniqueness of its own.
Lack of research
Lack of research is one of the important reason behind the startup failure. No matter which field you step in, there is a market out there. In order to succeed, you need to know it like you own it. You need to know everything about your company as well as your market. Most of the time, entrepreneurs neglect the market they are stepping in. They forget that the only mantra for survival is ‘Customers before you’. Your customers are everything for you and so are your investors. They eventually decide your startup’s fate. The sad part is that most of the entrepreneurs forget this simple yet undoubtedly the most important key to success.
Ignorance in legalities
Setting up a company is no child’s play. Certain permissions and registrations are required. You need to stay under legal limits. The government has laid out specific rules to set and start a company. In India, Ministry of Corporate Affairs handles all the legal issues related to companies and firms. But as important as they are, they are equally tedious and boring. And hence, they are ignored by many. One simply cannot ignore the need for legal registrations. They are one of the topmost priorities as well as the topmost reason for the failure of many.
Mess out of Marketing
One simply can tell that in order to attract customers, you need to tell them of your existence. In order to that, you need marketing. What most of the startups fail to understand is that marketing is a very sensitive issue. It can go wrong in many places. Marketing needs to be done carefully and should be properly planned. No marketing or improperly planned marketing is the reason for the failure of many startups.
One of the reasons for startup failure is Capital. Capital again is important at every step of setting and running a business. The problem with most of the startups is that they do not understand the need for a proper budget plan. Startups tend to exhaust their money on unwanted events which then led to startup failure.
Where is the business plan
Startups naturally mean many over-enthusiastic people. Fresh with an idea and the prospect of making it big, startups tend to mess up a lot. One of the biggest mistakes these startups make is not planning things properly. A business plan is very important for the running of the business. Most of the startups overlook this fact and their young, inexperienced minds see no importance of a business plan. Eventually, this leads to failure of the startup.
Lack of a good team
It is an obvious fact that a good dedicated team is required in order to make your startup successful. However, most of the startups fail to summon a good team. It may be due to the lack of dedication or motivation.
Decisions went wrong
There are millions of decisions you take while setting up and running a startup. Although these decisions are small but matter a lot. A simple decision of choosing a company’s name can even sometimes lead to great blunders. A decision regarding the location or choosing partners can even account for the failure of a startup. Sadly, most of the startups are many a time not ready to accept their blunders. This is generally a result of improper advice, lack of vision and egoistic nature in play.
It just happens
There are times when you cannot blame anyone but time for your failure. Some things are just not in your hands. Sometimes, even with a great vision and highly efficient strategy, startups tend to fail. This may happen due to the ongoing trend or market traditions. Sometimes, new ideas and innovations are just hard to accept. This sole reason leads to failure of some really promising startups. That, however, does not mean that the startup has failed. It is just a mistake, which is to be rectified.
These are some very common reasons as to why a startup fails. But in no sense, you need to feel demotivated. You need to know that failure is acceptable. Learn from the mistakes of the others. Try and analyze things and you will be saved from many blunders.