Common Reasons Why Your Startup Failed

 

98% of startups fail! These figures raise the question, why? We live in the era of emerging startups. And despite this startup failure rate, most individuals dream of quitting their 9–5 to embark upon an entrepreneurial journey. Governments too favour startups. So where does the reason for these shocking numbers lie? Why Startups Fail?

Startup is a company in the first stages of operations. Lately, building a startup is quite the hype, but many people forget that starting a business is a lot harder than they think. By the time people realize where they have faltered, it is usually too late to save the sinking ship. After tragedy strikes, they contemplate the whys and hows. Has your Startup failed too? And you wonder what might be the cause? Well, here is a list of some common mistakes of a startup that lead to their downfall:

Reasons for startup failure –

• Monetary Misassumption

One of the leading reasons provided by people when asked- “Why your startup failed” is running out of money. Often startups go through high expenses, poorly managed costs, overestimated profit coming in terms with underperforming sales, improper budgeting, and bad planning, leading to money running out. Some startups even fail to obtain the financing needed to sustain their business. It is extremely important that the budget is planned out in the starting days of the company to make sure the expenses don’t go overboard to a point where the only way to recover is by making astronomical profits, which is too much to ask from an unstable startup. Monetary Misassumption is a common cause for startup failure.

• Failure to recognize the target market

Your target market is what keeps you afloat. If you define your niche carefully, you’ll easily be able to find your target audience and market your product to them. Often entrepreneurs get too caught up in their ambitions regarding the product and fail to consider their target market during the planning stages. If you want your business to grow its customer retention, instead of targeting everyone, your marketing should be targeted toward your product niche demographic.

• Failure to engage the target market

Even after some entrepreneurs recognized their target market, their Startup failed. The reason for this is, that identifying your target market is not enough. You must also know how to engage them. Know the needs and wants of your target audience that your product can fulfill. Provide useful, engaging, and relevant content to them. Make sure your content is targeted and relevant to your product, your audience, and your environment.

• Lackluster Research

Startup failure is often caused by a lack of research. You must know what your customers want. No matter how great your product or service is, it will not sell if nobody wants it. Entrepreneurs often try to escape the effort of homework and researching their market, leading to their inability to decode how to meet their potential customers’ needs.

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