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Entrepreneur's Corner

Dear Entrepreneur, Here Are Top 12 Reasons Why Startups Fail

BY Getrude Mathayo · October 5, 2022 01:10 pm

KEY POINTS

Company owners and entrepreneurs start off their companies on a high streak of passion and dedication. Some entrepreneurs are challenged with solving an interesting problem, only to find out later that it does serve a market need.

KEY TAKEAWAYS

Numerous startups will fail to find success because they aren't customer-centric with their approach to running a business. If you want to obtain continued success, you should show your customers that they are important to your business

Growing from a startup or mid-market company into a scale-up is a challenging transition. Even the most experienced CEO or executive will admit that growing pains are inevitable once you start scaling

Running a startup is a difficult endeavor for any entrepreneur, which means that you’ll experience a significant number of struggles in the early months and years of this process.

Before you delve into the lengthy and complicated process that comes with building a successful startup, it’s important to understand that all companies run into their share of problems. If you want your startup to garner success, it’s essential that you do what’s necessary to overcome these problems.

  1. Hiring the Wrong People

If you’re an entrepreneur who believes in your product/service and has a good idea of what it will take to create a successful business, you likely understand that you’ll need to hire employees throughout the process if you want your business to properly handle growth.

  1. Lack of market study

Company owners and entrepreneurs start off their companies on a high streak of passion and dedication. Some entrepreneurs are challenged with solving an interesting problem, only to find out later that it does serve a market need.

  1. Lack of Planning

Many startups won’t plan for the future because they feel like their idea for a product or service is enough to garner success. While having a great idea should help you in the early stages of forming a startup, you need to combine this product with a comprehensive business plan if you want sustained success.

  1. Not learning from previous mistakes

Making mistakes is an essential part of any business, it’s only natural. But the critical element here is whether you learn from them and optimize going forward or just keep repeating them. So, make sure to study your market history very well and pinpoint mistakes older startups did so you can avoid them.

  1. Poor partnerships

Strategic partnership management plays a major role in the success of any company in all its life stages. When they don’t contribute to your brand awareness or don’t actually help generate any leads, revenue, or in any way help in your business goals, you have to face the facts and change something in your partnership acquisition process.

  1. Expanding Too Quickly

No matter the industry you work in, it can be difficult to understand when it’s time to expand if you’ve never created a startup before. Among the more common reasons that startups fail to find success is because they expand too quickly when they aren’t actually ready for the demands that come with expansion

  1. Ran Out of Cash

Money and time are finite, and both need to be allocated prudently. You need money to find that elusive product–market fit. You can pivot but your chances for success run out when your cash runs out

  1. Pricing and Cost Issues

Finding the right price point for your product is especially difficult for startups because the product or service may not have any comparable offerings in the marketplace. You need to price your product high enough to cover operating costs and make a profit for some cash flow while keeping it reasonable to attract customers.

  1. Lack of Adequate Funding

If you have a great idea for a product or service that you believe can be successful, you need to market this idea to prospective investors if you want to be able to grow and expand your startup in the years to come

  1. Loss of passion and consistency

Every beginning has a unique passion that pushes you to the limits. This is no news to every entrepreneur before he hits his first obstacle and the honeymoon phase starts to fade away. Rushing your business into quick results will quickly doom its failure

  1. Not Being Customer-Focused

Numerous startups will fail to find success because they aren’t customer-centric with their approach to running a business. If you want to obtain continued success, you should show your customers that they are important to your business

  1. Not setting long-term goals

Goals give you direction and keep you on track during the day-to-day operations. By making sure your goals are smart, you can identify where you want to go and outline the specific action steps needed to get there. This is something most business leaders understand and do well.

Related Content: Why Mentorship is The Solution to Challenges Facing Startups in Kenya

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