It takes a lot of courage to open a company with almost no experience and industry exposure. But a large part of the youth is showing that kind of confidence and is stepping in the field of business with the idea of becoming an entrepreneur.
Nowadays, starting a startup has become a common thing. But, the question is, how many of them became a success at last? Most of the startups fall apart due to some reason or the other.
Here are a few common mistakes that lead to a startups failure:
#1. Not Catering To The Market Need
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Many budding entrepreneurs do not consider the current requirement of the market and produce a product based on the idea that they think is the best.
#2. Not Knowing Their Target Market
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They might develop a product or service without keeping a particular segment in mind. Not knowing the market that you have to target or should be targeting is a grave mistake.
3. Run Out Of Funds
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The initial investments have to be done by the founders on their own (in most cases). But when a bunch of college students comes together to develop a business, maintaining a regular cash flow or arraging for funds can become an issue for them.
4. Don’t Find Any Investors
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Not everyone possesses skills to convince people to invest in their new and small company without any guarantee for success. Also, in most cases, they don’t even have a strong pitch to present to prospective investors.
5. Poor Or No Management At All
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They are unable to settle on a particular strategy for their business and hence, aren’t able to follow it and focus on it. The execution gets weakened resulting in bad results.
6. Not Producing User-Friendly Product
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Many budding entrepreneurs lack the understanding that laymen aren’t as skilled and informed as they are. Thus, they fail to make products that are user-friendly. This complexity makes people disinterested in opting for their product.
7. Not Using Personal Connections And Network
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Many a time, due to any valid or invalid reason people in the startup culture don’t use their connections to increase their business and sales.
8. Absence Of Passion And Skills In The Domain
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People involved in the new and small business think that having a great idea is enough and don’t take much interest in planning thereafter. Also, they hardly make any efforts to enhance their knowledge and skills in the domain they are working in. This results in lack of knowledge of the latest addition, trends and varying demands of the public at large.
9. Poor Business Model
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The business model is a plan that the team has to strictly stick to for years to come in terms of identifying revenue sources, customer base, details of financing, product, etc. Due to lack of knowledge or overconfidence, members of a startup lack on the foundation of their business.
10. Wrong People Coming Together
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If a startup hired employees with individualistic goals, it would prove fatal for the organization. These differences and other personal variation in terms of personality, closeness, friendship among others also account for the poor performance of the team and their strategy. Basically, they don’t have a common goal towards which they could work together.
11. Poor Marketing Tactics
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Most startups do not endorse good marketing strategies to promote their service, brand, and product. The thing is that they are not aware how to do it in the first place and due to lack of funds they avoid to opt for any organization that can systematically help them to build their position in the market.
Do you know any other common mistakes that can lead to a startups failure? Share your opinion with us and other budding entrepreneurs by leaving your comments below.
(Feature Image Courtesy: Medium)