Having your own business is a true luxury as there is no boundation; in fact, you are the one who makes rules. Starting your business means you are your boss, and your destiny lies in your hand.
Launching your startup company sounds enticing but do you know only 1 in 10 startups can survive in the market?
According to some sources like Forbes and Huffpost, around 90 % of online startups fail within the first four months.
Yes, you have heard it right; it’s four months. The above stats can be disheartening to see for all the young entrepreneurs out there.
But you mustn’t forget there are 10 % of startups who can achieve new heights. So you have to be optimistic instead of focusing on that 90%; try to see your startup in the 10%.
Along with thinking positive and optimistic, it is also essential to identify the reasons that contribute most to startup failures so that you keep those in your mind and save your startup from failing.
In this blog, I’ll discuss the top reasons behind startups’ failure so that you can identify those reasons and avoid the mistakes that most people make.
Top 5 Moves To Protect Your Online Startup From Failing!
1. Poor Market Research
Market research is an essential step to make your startup successful,
If you want to be a successful business person, it’s critical to understand your target market, competitors, and customers’ needs.
Doing market research helps you know who your customers are and what their needs are. Here are some reasons why you need to do market research for your startup
- It helps you identify your potential customers.
- It enables you to understand the needs of your existing customers.
- It helps you identify business gaps.
- It helps you know the new market trends
- It helps in effective decision-making.
How to do market research?
Here are some standard market research methods that you should use.
1. Market Surveys
Market surveys allow you to get feedback from your target audience to understand their behaviors, expectations, and requirements.
2. Interviews
You have to conduct a one-on-one meeting with members of your target market to ask them open-ended questions.
3. Observation
To know your customer behavior and interests, you have to observe your customer’s inaction by recording their videos in stores, at work, or home.
4. Focus Groups
Focus groups allow you to collect data from the carefully selected members of your target market.
A prime example of flawed marketing research is Kodak; Kodak’s revenues sheared out at $16 billion in 1996 and fell to $6.2 billion by 2011. It’s dropped 90 percent between 2011 and 2012.
The main reason for their failure that they failed to adapt to the rapidly changing market tech trends.
2. Lack Of Online Presence
An online presence of your business lets people know what kind of services you offer. Around 35% of business startups fail because of a lack of internet presence.
A solid online presence of your business makes it credible and trustworthy in your customers’ eyes. So make sure to build a user-friendly website for your startup so that you can satisfy the needs and wants of your customers effectively.
It would help if you also create a business profile on social media channels like Linkedin, Instagram, Facebook to reach a large audience base and better interact with your customers.
Take Aldi and Lidl’s example, successful grocery retailers that are now entirely overshadowed by companies like Walmart, Albertsons, Kroger because of their weak online presence, making them vulnerable in today’s market.
Here are some tips to improve your startup’s online presence
- Have a user-friendly business website
- Invest In Search Engine Optimization (SEO)
- Track your competitors
- Use User-Generated Content
- Create your business profile on social media platforms
- Analyze your website performance
- Run online ads
Get A User-Friendly Website For Your Startup Now!
3. Bad Marketing
Your business needs an effective marketing strategy to attract an audience. Almost 37% of business startups fail in a few months because of poor marketing.
If you can create trust in people’s minds, it doesn’t matter what services you offer; the consumer will buy it. To build that trust and credibility, you need a powerful marketing strategy. Here are some tips
- Constantly solve your consumer’s query.
- Get regular feedback from consumers.
- Make a robust social media presence.
- Be honest and keep your words.
- Add testimonials on your website.
Here are some of the products that could have been successful with good marketing strategies, but they failed miserably.
- Apple Newton
- Microsoft Zune
- Ford Edsel
4. Limited Funds For Startup
There are plenty of expenses of starting an online business. You need money to build a website, then comes hosting and domain, and most importantly, you need funds to market your brand.
To start a successful business startup, you need a stable flow of cash. Around 32 % of business startups have to shut down their business operations because of the lack of funds.
The growth of your startup depends on the funds available; therefore, it’s ideal that you plan the financial aspect of your business initially to be no shortage of cash in the future.
Here are some funding options available for your startup
- Bootstrapping or self-funding
- Crowdfunding
- Angel Investors
- Venture Capitals
- Bank loans
5. Lack Of Business Knowledge
Knowledge is the eye of desire and can become the pilot of the soul- Will Durant.
Business knowledge helps you understand your customers’ needs and preferences, deliver better products and services, boost products, and many more.
The growth rate of business failure is because of the lack of knowledge required to operate a business.
A lack of business skill and knowledge often leads to low productivity and slower production, increased costs, and many more.
To Make sure your startup does not struggle to survive in the market, only start a business if you have the required skill and expertise to run a company.
Here are some tips to gain business knowledge
- Listen to podcasts
- Attend business events
- Watch videos and TED talks
- Read business news
- Online business courses
Your Startup Need An Ecommerce Store To Thrive!
Conclusion
Around 1 out of 10 startups fail in their first four months; the leading causes of startup failures are flawed market research, weak online presence, lousy marketing, limited funds, lack of business knowledge. All the reasons cited can be dodged through commitment and effective marketing strategy.
In this blog, I’ve stated the top reasons why startups fail and how you can circumvent these obstacles and save your business from dying.
If you have any other queries regarding the above-stated points, please mention them in the comment section.
