6 reasons why your startup may fail
India has been a fostering environment for entrepreneurship and start-ups, being the 3rd largest ecosystem nurturing them. But a recent report by IBM Institute for Business Value and Oxford Economics found that 9 out of 10 start-ups fail in the first five years of beginning a start-up. Whether it is the poor market segmentation or failing to market your product here are 6 reasons explaining why your start-ups may fail.
Your start-up doesn’t solve market needs
Often, the product created by the entrepreneurs lack to reach the audience, or product placement is done poorly. This gap can be seen as vividly for Indian beauty products. With the evolution of the century, people have become more accepting and open to themselves. But Indian makeup brands still have a huge distinction to meet the demands of various skin tones. Western brands like Fenty Beauty by Rihanna are more inclusive of every skin tone whereas Lakme, one of the oldest known brands in India still lacks the range by only having 10-13 foundation shades. This doesn’t solve the needs of the Indian makeup consumers but makes them left out.
Your team lacks vision
Being a founder, you are the person responsible for the direction of your work process. If you do not take charge of your team and their responsibilities, it may not come out with a positive result. If any start-up has a de-motivated and confused team, it is evident to create a void even before the business starts. Everybody dreams of working for successful companies, but they were all start-ups once which took a unified team to reach that place.
Working on a start-up takes both labor and time. A team needs both leader and team players who are there for the bigger goal. Incorporating work ethics, responsibility, availability, professionalism, etc into one team is all fundamental. It might take some time for entrepreneurs to step in and understands the responsibilities, but once the group withstands as a unified team, the labor will eventually start showing.
Your startup is not generating enough revenue
A start-up is a young, fresh plan with which needs a proper path to move forward. For the first few years, the team should focus on small, tangible outcomes.
Several start-ups have considered short term, rushed goals for them where in reality they did not perform as explained in their business models.
However, your start-up should not be too slow in coming off the ground as well. With time, teams should work on their expertise.
Most start-ups have also degraded their market reach and the work they have done, focusing on a single-digit profit scale. They should focus on double-digit growth as well, not relying much in the time because sooner the business grows; the better the audiences will follow.
You are not evolving or innovating
Start-ups should be ready to evolve themselves with the evolving times. With thousands of new companies being launched every day, one cannot afford to not experiment or innovate. Lack of uniqueness in any business model presents a de-motivated environment for entrepreneurs as well as gives a lethargic impression to the investors.
Entrepreneurs must know and see what is needed when in the market. Considering the pace of cutting edge technology, services or probable solutions with evolving trends, one new technology can disrupt a whole business overnight. Thus, it is very important to keep up.
Your customers are unhappy
Customer relationship is an indispensable aspect of any start-up. Maintaining a healthy and productive customer relationship is the best way to ensure a bright future for any start-up.
A survey report by PTI suggests that 71 percent of Indian customers dropped an intended purchase due to poor customer service. This happens because start-ups are unwilling to pivot at the right time, instead of being customer-centric.
If your customers are not happy with you and your brand, you do not get brand loyalty. Just like personal relationships, it is equally important to nurture customer relationships for a startup. The customer feedback is a vital form of seeing the start-up. Multiple negative feedbacks can hamper the image of any start-up.
You are taking too much time to move to next stage
There is a right time to do any task. As an entrepreneur, you have to take the risk to engage in doing things in time, or with the evolving pace of technology, you may be left out. With numerous competing start-ups, one cannot afford to be even one step back. Anytime there is a dire demand for something, the feature should be applied. All these affect the future of any start-up. As an entrepreneur, if you want a chance at success, you have to take significant risks. Entrepreneurship is neither easy nor risk-free.
In this ever-changing world, failures are often a part of the picture. Yet moving forward and learning from them are the biggest standouts. Entrepreneurs realize that the agenda here is not just taking profit back home, but to build a business and flourish with it. So, next time you are down with your start-up idea, make sure you avoid these reasons.
Being on a road to entrepreneurship is a definite road with many hurdles to overcome. If you have any story of your hurdles which you overcame, please share with us at firstname.lastname@example.org or share your views in the comments.