Startups’ success can be a challenge. If you are an entrepreneur, you know exactly what I mean. Starting a business is not just about having a great idea, it’s about turning that idea into a business. This is part of the process that sets entrepreneurs apart. It’s the part that turns an idea into something real and tangible. That’s the part I want to talk about in this blog. I’ll be talking about the struggles of startups and the hurdles that they face.
How many startups fail exactly?
The Small Business Administration (SBA) characterizes a small business as an enterprise comprising fewer than 500 employees. Consequently, numerous businesses fall within the “small” category despite appearing quite sizable.
In the United States, the current count of small businesses stands at 31.7 million. However, a significant proportion of newly established small businesses fail each month.
Considering the substantial influx of business startups, it raises the question: Why do such a high percentage of these ventures fail?
What are the reasons for startup failure?
1. Money runs out:
According to investopedia, this widely given reason doesn’t really explain why a business failed. The money just dried up because it stopped coming in, so why did it happen? Was it due to poorly managed costs or because sales weren’t high enough? Money drying up also relates to an inability to obtain financing or further financing needed to sustain a business, especially in the early days, until a business can start generating profits.
2. No market research:
One of the most common reasons why startups fail is a lack of market research. It’s not enough to have a great idea for a product or service. You need to know if there is a demand for it in the market. You should conduct thorough research to understand your target audience, their needs, their buying habits, and their pain points. You should also analyze your competition to identify gaps in the market that you can fill. Without this crucial information, you may end up launching a product or service that nobody wants or needs.
3. Lack Of Research:
Understanding your customers’ needs is a no-brainer. Many aspiring entrepreneurs enter the market with what they believe to be a fantastic service or product, only to discover that there is no demand for it. It is only reasonable to recognize that your offering should align with what customers actually want. By conducting thorough market research, you can determine ways how to fulfill the needs of your potential customers. Doing your homework and understanding the market will empower you to meet your customer’s expectations in the most effective way.
4. Not taking customer feedback into account:
Your customers are the lifeblood of your business. Without them, you have no business. Yet many startups fail because they fail to take customer feedback into account. It’s important to listen to your customers and understand their needs and concerns. You should be open to feedback and willing to make changes to your product or service based on that feedback. If you’re not meeting your customers’ needs, they will go elsewhere leading to your business demise.
5. Failing to adapt to a constantly changing market.
The business world is constantly evolving, and startups that fail to adapt to changing market conditions are at risk of failure. It’s important to stay up-to-date with industry trends, consumer preferences, and technological advances. You should be willing to pivot your business model or change your product or service offerings if necessary.
Lessons that we learned from failed startups
While startup failure can be discouraging, it’s important to remember that there are valuable lessons to be learned from those failures.
Some of the most successful entrepreneurs have experienced failure before achieving success.
By examining what went wrong with failed startups, you can learn from their mistakes and increase your chances of success.
Some of the most important lessons you can learn include how important of market research can be, the need for strong financial planning, the value of customer feedback, the importance of a strong team, the power of effective marketing and branding, and the necessity of adapting to constantly changing market conditions.
As you can see, there are a variety of reasons why startups fail. However, the reasons are often the same, so if you can avoid them, your business will be more likely to succeed. The most important thing to remember is that startups are hard. It is not easy to launch a business. There are many challenges that you will face along the way that you may have never expected. With that said, if you can be prepared for them, you will have a better chance of overcoming them when they come up.
Thanks for reading and we hope you enjoyed this blog.
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