Top 3 reasons startups fail

Running a startup is hard. It would help if you did so many things; the list never stops growing. And if you're not careful, it can get overwhelming very quickly. So today, I want to talk about three of the most common reasons startups fail.

I) Run out of cash

In startups, cash is king. When running out of it, your business can quickly become a disaster. To avoid this situation and ensure your startup's success, you need to know how much money you'll need and how long you can live on that particular amount. It might sound easy, but it isn't—many factors influence the answer to both questions: income, as well as expenses, tend to be unpredictable at first, and most startups face difficulties making accurate forecasts about either one or both of them.

Fundraising is essential for startups, and the startup funding roadmap below shows different funding sources you can use to raise money for your company.

It is also crucial to create a budget with enough leeway so that if everything goes wrong with one aspect of your business plan (for example, sales targets), there will still be enough money left over for another part(s) of it.

The rule here is simple: keep six months worth of monthly expenditures saved up in case something unexpected happens! It will help avoid stress when things get tricky because they inevitably will at some point during this journey called entrepreneurship :)

II) No market need

A startup is a business looking to solve a problem in a new way or solve an existing problem with enough efficiency and effectiveness that it can make money doing so.

If you're not solving an actual problem for people, then there's no reason for them to pay you! The first step in starting any company should be finding out if there's even an issue worth solving in the first place. If something isn't broken, don't try fixing it—and don't start selling solutions until someone needs them!

35% of startups fail because there is no market need. Startups can reduce this percentage of failure by using a framework that can help them pick the right idea to bring to market

Please find out how people feel about their current situation by conducting customer discovery/validation: go out into the world and talk to them (face-to-face or on social media). Ask questions like:

• What are your biggest frustrations with life right now?
• What would improve things for yourself/your family/your friends/etc.?
• How much would YOU be willing to spend on such solutions?

Once you've gotten some answers from prospective customers, use this information as fuel for further research into whether other people share their pain points too...and if so, whether they're willing to pay good money not to feel those pains anymore!

• I am launching a program to help entrepreneurs gain clarity about what ideas to bring to market and grow their businesses. Check this post
• I am only accepting ten members (for better learning & personalized experience): door close October 11th, 2022. Click below for more information.

III) Got outcompeted: ?

When starting a business, you must be prepared to compete with much larger competitors with better resources. You can outcompete them by building a superior product or service. But if your startup cannot disrupt the market quickly enough, it will be outcompeted by other startups offering better value for money or customer services. Once an idea gets market validation, many will seize the opportunity. Make sure you protect your business with IP, trade secrets, etc...

More often than not, however, startups fail because they get outcompeted by more prominent companies in their respective markets. This can happen due to several reasons:

* Customers get bored of using their products because there are no innovative changes over time. So keep things fresh with regular updates every once in a while.

* Newer entrants offer better pricing models – Make sure you are differentiated from your competition and have a defensive moat to protect your business.

Conclusion

But as we've seen, there are many reasons why a startup might fail. Some reasons are out of your control, and others you can mitigate with good planning ahead of time. However, to avoid failure, you must understand the risks and take steps accordingly before investing a lot of money into something that may not pan out.

Join the "From Idea to Impact" program to Learn Strategies and Systems, Gain Clarity & Grow your business without being Overwhelmed

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From Idea to Impact program: Launch; Accepting ten members Only, the door closes October 11th, 2022.

?Entrepreneurship can be challenging, uncertain & lonely. Do you feel you are missing opportunities because you doubt yourself?

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If you have any other questions, please leave them in the comments below!

?I appreciate your readership!

About me: Dr. Nadia Boutaoui, Ph.D., MBA (Healthcare)

I am a?scientist, innovator, and entrepreneur. I have?a Ph.D. in Genetics, an Executive MBA in healthcare, and I am certified in Tech Innovation and Entrepreneurship (Tie). I am the founder and CEO of NanoNares, a startup developing tools to improve drug development for respiratory diseases. As a primary caregiver & entrepreneur, I am all about clarity & efficiency.

I did research at Harvard Medical School and Directed a research laboratory in the genetics of respiratory diseases at the University of Pittsburgh. I managed multi-million NIH-funded grants, co-authored over 34 peer-reviewed research papers, and trained?many clinicians & researchers.

I am a mother, entrepreneur, and business coach to healthcare tech startups. I know firsthand what women entrepreneurs face, and I experienced the transformation after joining link-minded business communities, and I am building a community to support women entrepreneurs.