July 29, 2019 ,
According to research by Statistic Brain, “46% of startups fail due to incompetence and 30% due to lack of experience.”
The worldwide ratio portrays that for every successful startup, there are 4 others that perish in the long run. Entrepreneurs who have the ability to identify risk factors can take the necessary steps to prevent it. While the secret to guaranteed success for your startup business is difficult to find, make sure to avoid these 4 deadly mistakes that can lead to complete failure –
“Life is too short to build something that nobody wants.”
Research states that almost 42% of startups fail because they are unable to solve a market need. This is one of the biggest mistakes that entrepreneurs make – trying to provide a solution to a problem that isn’t really there. It could be due to the fact that the need is already being met very well in the market or you’re building something that does not interest your audience.
Before starting a business, it is important to have answers to a few questions like “Who will be my target audience?, Do people have a problem where my product/service can provide a solution?, What gap will my business fill in the market? Apart from that, test your product in the market and take feedback from the relevant audience to understand if there is a need for it before launching it officially.
As the saying goes – Jack of all trades, master of none – trying to achieve too many things or trying to be too many things to the audience all at once, can be a reason for your startup failure. This approach may seem lucrative as there is the possibility of targeting a bigger audience, but when what you offer becomes too generalized and you fail to provide a definite solution to a definite customer, your startup bears the brunt.
The solution is to focus on a smaller but more targeted audience for faster business growth. Take the example of the dog food startup, Dogsee Chew that has now reached international markets. Instead of producing just dog treats that are already available in abundance, the brand provided a definite solution to pet parents by producing 100% natural, human-grade treats. With this unique idea, Dogsee was able to create a sustainable market presence in 17+ countries in a span of 5 years.
Before launching a startup, your media strategy needs to be in place. For a startup that will be new in the market, generating buzz, earning mentions in popular blogs and media coverage requires adequate time and effort.
Digital PR, as well as a partnering program, is extremely important to support and promote your startup brand’s digital and social media presence. It not only enhances communication, drives traffic and helps maintain your online reputation but also caters to meet your business goals by driving sales and generating leads.
“You must gain control over your money, or the lack of it will forever control you.”
While running a startup, growth can happen very fast but cash mismanagement can have an adverse effect, even causing downfall for many startups. Just building a perfect product to impress the world is not enough, you also need to pay attention to the amount of cash burn that’s happening.
Financial decisions like the amount of capital required to get a customer, where the money will come from and whether the model you choose will have scalability should be taken into consideration. When it comes to financial metrics, there are two important aspects of every successful startup – the capability of generating profit and the ability to manage cash flow.
Launching a startup is not an easy task, and building a successful business that has the potential to grow takes a lot of effort, energy and time. As a founder, if you can avoid the most common but fatal mistakes that lead to failure, your odds of being successful will be much higher. To know more about business growth and the mistakes to avoid, ask us a question in the comment section below!