We all go through a phase in our lives where we think about starting a company with some partners. But, 90% of the time start-ups fail within the initial three years, leaving behind just a corpse of an idea which could have been turned into a brand if it would have been initiated carefully.
Start-ups have always been a base for establishing any industry. All the big brands that we constantly see and hear about today, were mere start-ups at their initial stage. They grew into a brand through hours of dedicated research, preparation, and execution that was brought out through an unbreakable bond of team members.
Today, we are going to talk about some reasons that lead to start-up failure and how to overcome them.
1. Ineligibility for Market Requirements
This is one of the most common reasons that lead a start-up to the doorsteps of failure. Shockingly, 42% of the start-ups lack market demand that prevents them from gaining the required traction they need to survive.
Remedy: Most of the start-ups are initiated as a plan between some partners that thought it as a need of the hour. A start-up is not just about opening a company and hoping it would become a brand. Rather, it requires a full-proof marketing strategy determining why it will be successful, till when it will stay successful and most importantly, how it will become successful. When a business plan is initiated with a proper marketing strategy, it turns out to be fruitful.
2. Competitiveness above the Limit:
We all understand that competition is one of the main elements required for the success of a brand. But, when the competition is cut-throat, it can turn out to be a reason for a start-up’s failure. Having a first mover’s advantage in any industry is always a good thing but when you already have some established names in the industry, a start-up can be pounded to the ground due to too much competition.
Remedy: While entering into an industry, it is always a wise decision to check the industry thoroughly and prepare a report on how would your brand emerge as a trend changer in an existing sea of great players. Thoroughly check all the aspects of the industry before you take the plunge.
3. Selection of the Wrong Team
Once you are done with the analysis of the market and have a check on the competition, it is now time to assess whether you have the right team to carry out the activities in the correct direction. A team of people who do not work as a contributing factor can lead any business towards failure.
Remedy: With a cohesive group of highly motivated, persistent, and diversely skilled people, who are united around a common vision,it can solve all the issues related to a start-up’s growth.
4. Business Model not Appropriate
For any start-up to work and foster, the business model must be planned accurately. Lack of monetization strategy, focus on single-channel are some of the reasons that lead start-up to failure.
Remedy: A sound business model with confirmed ROI is the most efficient method that one can select for a business to flourish.
5. Lack of adaptiveness with Latest Trends of Marketing
In the era of digital marketing, the basic strength of a start-up’s success is being adaptive to the latest trends in internet marketing. Old school marketing is effective up to one extent but they do have some limits that would manipulate the growth of a business.
Remedy: The best method to solve such a problem is to match the percentage of old school as well as internet marketing and utilize it to work in favor of the business. There are several modules involved in digital or internet marketing and the best method to use those modules is to hire a digital marketing agency that would lead you towards success through effective marketing strategies.
It is important for a start-up to look into these factors before taking their first step into entrepreneurship. While it is sometimes unavoidable for start-ups to escape all these situations, with proper action towards the path of an effective remedy can help eradicate all the obstacles on the road to success.