Did you know that 90% of startups fail? Having to watch your own business fail is bad enough but not knowing the reason for failure is worse.
Some say its luck, while others say it’s the economy. What are the actual reasons that startups fail?
1. Founders give up
After listening to stories after stories of successful entrepreneurs, the main reason for success is the determination in them. Although circumstances may not go their way at times, the founders never give up. Founders that call it quits after a few rejections or obstacles never become successful.
2. Poor team
A poor team is the reason for the downfall of many startups. For a startup to be successful, it must have partners that share a common vision and have differing strengths. Partners must also develop trust among themselves.
3. Startup runs out of money
Running out of cash is another reason for startup failures. This could be due to overspending or failure to raise enough money. Cash is the lifeblood of a business, without it, it is very difficult for the business to survive.
4. Lack of planning
If you fail to plan, you plan to fail. It may be a cliché, but there is truth in it. Startups that do not have a plan that they follow, they are moving aimlessly like a ship cruising without a compass. Every single business needs to have a forward plan.
5. Too ambitious
Startups should begin by dominating a targeted market segment before expanding. There must be focus to build a foundation before expanding into other markets.
Many entrepreneurs out there have failed countless times before succeeding. So, even if you have failed before, do not be discouraged. See these failures as learning experiences so as to do better the next time.
Read also: Pre-Requisites of an Entrepreneur
Article contributed by Startup Jobs Asia‘s Team.
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