What Leads to Failure of Startup?
If you are thinking about starting your own business venture, then you will have to take some meticulous measures so that you can provide a fair initial thrust to your business. Along with your business plan, there should be a ‘plan-B’ which can be used if there is any misfortune with your business venture. Staying prepared for the worst situation is important for any company and also for your personal finance. If you stay alert from the very beginning, you will be able to surpass major losses. Here, we will discuss some common reasons for the failure of a startup business.
Reason #1 – Market Turmoil
When it comes to business, two factors have been considered, which are responsible for the success or failure of a business. The first one is internal factor and the second one is external factor. First parameter can be controlled with the change in action plan or approach. But, in most of the cases, external factor cannot be controlled so easily. External factors can be several, starting from geo-political to global economic turmoil – it can be anything that happens outside of an organization though influence the organization highly.
Hence, business owners should be prepared for the worst situations and keeping that in mind, one has to take different business actions. For example, if market trend is in a wrong way or global economy is sinking, it may not be a good time for business expansion. However, depending upon situation, it can be a good situation for investments or a friendly situation for launching new or innovative products or services to lure the clients or customers. Those who fail with their startup business, often do not consider market situation and hence find themselves plunging in the water of concerns or uncertainty.
Reason #2 – Choosing Right Personnel
For a startup business, it is always important to choose a good team and business owners should have ‘zero tolerance’ in this case. Build a team of competent people, gradually train them, and compensate them well so that they can feel the sigh of security. Most of the entrepreneurs lack in this department and in search of ‘cheap labors’, they put their organizations’ fate in deep darkness. Saving expenditure is important but employees should be regarded as – ‘human capitals’. The value of human capital is immense and indeed it is the major factor that decides that future performance of your business.
Reason #3 – Poor Management – Business Model Failure
Management team of a business house should be regarded as the nucleus of a business. Hence, managers should be to the point or accurate with their decisions. If you are a startup entrepreneur, then you must be alert while taking major or even minor business decisions. One mistake may cost you so immense that you will be left with no choice than closing down your venture. Management tactics should be learnt with precision and a professional business coach or a financial advisor may help you. Apart from that, business managers should undergo salient short term business training sessions in order to streamline their skills with the business requirement.
Read also: 6 Reasons Entrepreneurship Is Not For You
Article contributed by Startup Jobs Asia‘s Team.
Follow Startup Jobs Asia at:
Facebook | Twitter | Google+ | Linkedin | YouTube | Pinterest