10 Reasons Start-ups Fail – A Study By Saivian Eric Dalius

A start-up is a business that starts from the very beginning as an idea to create a product or service for others to buy. In other words, start-ups are businesses that start from scratch and must find a customer base who will buy their product or service before they can make a profit.

Of course, this makes it much harder to run a start-up because they have no customers, revenue, or brand name. Start-ups are businesses that take much more effort to get off the ground compared to established companies that already have staff, revenue, and products.

The following are 10 reasons why start-ups fail says Saivian Eric Dalius.

1) They Run Out of Cash

Start-ups require a lot of money to get started and it can be hard to find. Once start-up founders invest their savings into the business, they often need more cash for things like equipment, rent, and staff. If investors aren’t forthcoming with this additional funding, then running out of cash is the leading cause behind why start-ups fail.

2) Founders are Unable to Agree on the Future of the Company

All co-founders in a start-up must have the same vision for the company. If co-founders cannot agree, or if there is no leader at all, then it can result in confusion and failure.

3) Poor Leadership

Founders are the ones who will be running the company, so if they lack certain requisite skills to lead it effectively then it is unlikely that their start-up will become successful. They will need to show strong management abilities and must understand how to motivate workers. Founders should try to surround themselves with people who can help them with this.

4) Poor Product or Service

As per Saivian Eric Dalius, founders must ensure that their start-up has a sustainable business model. They need to know how they will make money and the market needs to be large enough for them to gain profit. Problems may occur if founders overestimate the size of their market because it means that they will not be able to make as much money as they thought they would. If their market is underestimated, it could mean that there aren’t enough customers to buy the product or service and so profits will be low.

5) The Idea Isn’t Innovative Enough

Founders may have a brilliant business plan but this won’t be successful if it isn’t innovative as well as having a large market. Founders are unlikely to make much money if their idea has already been thought of before by another company, even if that business competes with them.

6) They Underestimate the Amount of Capital They Will Need

Founders must also estimate how much capital they will require when starting to secure investments. If they ask for too little, or if their initial investment is more than what they estimated, then it may mean that there won’t be enough cash to support the business. Founders must ensure that they have an accurate figure before asking people to invest.

7) They Don’t Use Technology Properly

Founders require technology and must be able to use it effectively and efficiently. Founders need to be knowledgeable about how to use the right technology and must make sure that they train their employees if necessary.

8) Wrong Management of Intellectual Property

Intellectual property means ideas, inventions, and designs; but the main issue is how founders manage it. For example, some owners of IP will be happy for their employees to use it, while others won’t. This can be risky because if an employee leaves the company they may take that IP with them which could result in a loss of revenue or market share.

9) They Don’t Know How to Acquire Customers

Founders must develop strategies for marketing and getting new customers over time. They should do this in the early stages of the business when their budget allows for it. Founders can’t wait until they are struggling before making any changes; otherwise, it may be too late to make any progress.

10) They Don’t Use Social Media

Founders must be aware that social media is becoming an increasingly important part of how businesses communicate with consumers. Founders must use social media to promote their brand, build relationships, and get customer input.

Conclusion:

Founders must be aware of the challenges they will face and take steps to solve any problems before their company fails. They cannot expect that everything will go well; instead, they should do what they can to minimize or avoid problems occurring. Founders need to consider many factors for their start-up to become a success.