Do you know that failure is common for most startups? The dark truth is – nine out of ten startups fail. It doesn’t matter what industry they belong to, 70% of them fail during the first 2-5 years of their establishment. Scared?
Well, the intention behind sharing these statistics isn’t to scare or discourage you but to make you understand that starting a business isn’t easy. So, whatever success stories you’re probably reading that brings overnight success, most of them are just an exaggeration or fabrication.
Now, let’s not waste any more time and get straight to the point. How do you get rid of startup failure for good? Before we move to that part, let’s start with why it fails.
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So Why Does a Startup Fail?
There can be many reasons behind a startup’s failure. For example,
- Businesses might be targeting the wrong demographic.
- Inability to obtain finance and hence, running out of money.
- Lack of research or failing to realize that there is no special need for the products or services you’re offering.
- Conflicting partners or partnerships may not work.
- Bad marketing or don’t have the budget to do it right.
5 Tips to Get Rid of Startup Failure
#1. Know Your Competitors
As an entrepreneur, you must have a clear understanding of your competitors. Aside from that, you should also be aware of the current market affairs within your niche. Knowing where your competitors have succeeded or failed is the most effective strategy ever.
#2. Conduct a Thorough Research
You must know everything about your target market. Research is the holy grail to making your startup a success.
Learn everything you can about your customers. Know about their wants, their needs, their income, and what interests them. The more you know them, the better you can pitch your products or services.
#3. Test Your Products or Services
It’s hard to test your products or services, knowing the hard work or effort you’ve put into them. However, business leaders say you must be critical of personal market tests.
Some even say that your business explanation should be simple enough to be grasped by a first-grader. Well, you don’t have to take it literally. But the point is to make your explanation as easy to understand as possible.
#4. Maintain the Cash Flow
Underestimating the amount of cash required is one of the primary causes of startup failure. Everyone knows that the need for money can be to start a business, create products or services, market, advertise, etc. But what most people forget is that they also need capital for troubleshooting.
In short, you always need more cash than you can ever imagine. So, don’t ever let the cash flow dry up.
#5. Start Hiring Small
When it comes to hiring people, start from a small number. Whether you pay more attention to personality or brain power, it’s your call. Just ensure you’ve got the minimum number of candidates to start your business.
Starting a business may be difficult. Many may even fail. But your startup doesn’t have to be among them. Follow all the tips outlined above to ensure that your business remains in the 10% that succeed.