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Every startup entrepreneur thinks that they will be the next billionaire, but the fact is that 90% of them fail to survive.
Millions of startups are being initiated every year, but only tens of those survive successfully in the marketplace.
Romantic ideas, engaging presentations, hard work, research, preparation, and perfect execution, are various things impart in a successful business.
Top 10 Reasons Why Startups Fail
Most of the time, startup failure due to the involvement of multiple factors such as:
#1. Lack of product/market fit
The selection of wrong products is one of the significant reasons behind any startup failure. The reasons might be different, whether due to the putting up of wrong strategies or the improper execution. But the production of faulty products may take your business into ditches.
#2. Selection of the wrong team
To make any business successful, a good management team works smartly. But a weak management team can make mistakes in multiple areas.
#3. Pricing Issues
Figuring out the pricing module is one of the biggest challenges startup businesses usually face.
Pricing is a compromising act where one wants to make maximum profits but fails in retaining the lower margins. To make any business profitable, one needs to add all the operational costs that sometimes go out of the way.
#4. Ineffective marketing
No one will recognize you if you don’t introduce yourself to them. Most startup entrepreneurs keep focusing on the products only and don’t care much about its marketing, which is the point they fail in continuing their business.
#5. Poor timing
Every product needed to be launched at perfect timing in the marketplace to raise its sales over time. Most startups get failed as it might not be the ideal timing to launch that particular product in the market.
#6. Legal challenges
Value of customer privacy and data security is one of the top things that every business needs to be taken care of.
Most startup businesses face issues due to the exposure of various legal challenges. So it would be more helpful for an entrepreneur to become aware of the laws of business related to that particular area to remain well aware of it.
#7. Bad debts
We all need some credit to make our business on track, especially in the starting phase, but this credit sometimes further leads them to face worse conditions in the future.
The situation worsens when the client fails to avoid further credit requests and gets mischievous or indulges in the financial crunch.
#8. Lack of Cash
A large number of startups fail every year only because they fall short of cash at some particular place.
Unavailability of sufficient funds to cover operational costs may fall any running business into ditches.
#9. Disharmony among team/investors
Team members and investors are all humans, and any of your behaviour can create a higher level of discord among them.
Self-centred thinking in any business may lead further to various conflicts, which may finally damage the backbone of any business.
#10. Customer ignorance
Ignorance of customers at any level is one of the most substantial reasons behind the failure of any business venture.
Using tunnel vision and ignorance of customers’ feedback are the fatal flaws for any startup.
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