5 REASONS WHY 70% STARTUP FAILS

In the 21st century, the startup culture is growing at a high level. Today, these startups are the only ones who are creating more employment around the world. We can see today for the startup people from technology to medical, chemicals to education, hotels to the universe. According to the Startup Genome, article startup industry has grown from 4 billion dollars in 2013 to 80 billion dollars in 2019.

One of the startups of Elon Musk is "Neuralink", we can see the results tested recently in this month of August 2020 only. Then some of the best startups in the world like Uber, Airbnb, Oyo Rooms, and many more. Hence, we can conclude that in coming future the startup culture is going to be the biggest contributor for the countries economies.

You have also heard that the first 5 years of any startup decide whether they will become a bigger corporate in the coming future. Every company focus that they can go for both vertical and horizontal growth, i.e, expansion, and profitability. But, in this race, many startups can't survive even for the first year only and the owner has to close down the company. Why is this happening so? Why companies are closing down even they have raised millions of dollars as a fund from the investors?

Let us discuss the main important five points that every startup should consider before starting the business. These points are applicable to every industry.

Market Analysis

Today many wantrepreneurs are starting the business on the assumption base. Suppose you faced an issue and saw that there is a problem in the market, you thought that will start a company to solve this problem. You started to make the plan, making website, product, and hiring people to make the work successful. But when you step into the market, the reality was something different and you saw that this is not a major problem.

All your money has gone in vain and your most important time had gone in vain too. So before, starting any business must do the proper market analysis. For example:- Is this the real market problem? Is there any product to solve this? Will this problem will be going to remain for a long time? How can I start this in a very low or a budget equal to pocket money? and many more, etc.

Funding MIndset

I have personally seen there are many wantrepreneurs that, if they have found out some problem that is real in the market and will also remain in the market for a long time, having a high growth potential then also they are not able to run the business even after getting the funds. You know the reason why? Because they have the mindset that when they will get the funds, everything will get into the track. But this is not the truth, the reality is different.

What you should do then? Firstly, find the way out how you can start a business at a very low budget so even if you lose the money, then also it doesn't affect you that much. At first, make the business plan, marketing strategy, keep contact with investors(for future) and raise funds from your own pocket money or take a small loan from friends and family, then run a test flight model of few months and see the results. Then according to that plan further.

Money Making Mindset

This point is applicable to both new upcoming startups and existing companies. Yes, business is all about solving the market problems by the products and making money as a byproduct of that deed. But running a business just to make money, will very soon take down any company. Yes, when we see that, "Oh yes..!! It's making me a lot of money" as we have seen in one of the best movies, "Wolf of Wall Street Journal".

So while doing the business always focus on how to make the product better, better customer service, better offers, and marketing, better growth then you will make money as the byproduct for sure. But doing business for earning money is not a good step, for that you can go for a job.

Management and Team

For any startup or even the running business, the company management and their team are the most important asset for the company. If you don't have the proper management and great team, even after everything is perfect there will be a deficit growth of the company. For example in your company, there is work will take only 2 days but to complete that team is taking 5 days. It means either there is no proper management to channelize the way to make the way such easy that the work will get completed in 2 days. And when you see everything is fine then why the company is not performing well? Even if everything is fine, then why the people you hired not giving their 100%?

So, you need a perfect framework where you will have the data on how much work has been done on a particular day. How much effort is required to complete that work? Self-analysis, of the employee which work, will be better for her or him. How you can channelize the work in such a way you can complete the work on time? What will be the next strategy for the business to grow? etc.

And Lastly...

Business Strategy

Startup companies are rising from every sector in today's time. Every startup needs to plan either they want to expand at first or want to grow at first. And as I'm a business strategist I believe that every company should follow the stairs plan. Let us see this with an example:

Suppose you have a retail company. At first, you choose an area and opened a shop there, now when you saw that shop is coming into profit or a neutral zone even, start focusing on the other area where you can open a new shop and hired someone who is more skilled than you and made the shop profitable and vice versa. What happened here? Profit, Growth then again profit, growth and it continues. Now, if you are only focused on growth then you have to be the fast mover if you are not the first mover because making the business expand and profitable you have to create some monopoly like Oyo Rooms did. And most important you shall have a business analyst who will analyze your business plans, management plans and help you out to execute perfectly.

So, I want to conclude that every business shall focus on these five points, so they can grow at a very great pace.

If you want Business Consultation, or want to grow your company at a great level, feel free to make connection with me on LinkedIn. Always, there for help.

Business is the key for changes in any country. - Rishabh