September 4, 2017
Research has proven that 90 percent startups fail after five years. For an aspiring entrepreneur, this stat can be disturbing, unless you have the right tips tools at you disposal to get the job done.
Every entrepreneur’s dream is to break even and thrive like other big companies such as Google, Amazon, and Apple. Unfortunately, having a big idea comes with fault lines that could easily shatter your dream. Below are some outlined reasons how you can avoid falling into the 90 percent trap:
Starting With The Wrong Team
Ever wonder why most successful businesses retain their first set of the employee? When starting a new business, you need to commit to hiring the right people on the first try. There's nothing that hurts a startup more than a high turnover rate.
Starting with the bad employee is a typical cause of failure for many businesses. To avoid this pitfall carefully employ persons who will always be committed to your company's mission and the people in it.
Refusal to Take the Bull By the Horn
One key criterion to succeed as an entrepreneur is to believe in yourself, find your market value and go against all the odds. This pattern is quite productive because failing to find the market value for your product or services is akin to having a product or services that will be dead on arrival.
Entrepreneurs who refuse to take the bull by the horn in all aspect are liable to fail. Hence, get your prospective market value analysis seriously to avoid funding a failed project.
Ignoring Due Diligence
Due diligence is the standard operational procedure to ensure that an investment or business decision makes sense. There is no shortcut in business. However, from my personal experience and observation, I have come to realize that most entrepreneur who avoids due diligence are looking for trouble.
In starting a business, follow the lay down legal requirement and government policies to avoid being caught in the web of failure.
Lack of Experience
Learning from others is imperative to startup success. Experience helps, but getting advice from people that have already been there can go a long way in help to educate yourself about the fundamentals and principles of operating a business.
Learning from others will also help you plan for the future, outline the known risk, study market capitalization, and other important business factors.
Lack of Involvement
Every potential entrepreneur should value his or her business like a diamond, partake in planning and development, and generally commit to the company as a whole.
Most successful entrepreneurs are usually the single decision-making figure of their startups. This might come off as been too rigid, but getting involved in all areas will enable you to build a business with you in the picture.
Planning based on assumptions is a call for collapse. Do you say your product or services will suddenly come out from the blues and capture people’s attention over other well-recognized brands?
This sort of assumption will only work if you introduce a uniquely differentiated product with an outstanding value proposition else you will simply join the 90 percent.
Lack of Adequate Support
The best support you will receive while building your business will come from your family and friends because they will always be available to throw their weight on your decisions. Plus, a little confidence during trying times can go a long way.
This will alleviate the stress involved at the initial stage. Without their support and encouragement, you could get a severe increase in pressure or stress which is another factor responsible for making entrepreneur slip into the 90 percent.
At a point in time, lack of self-confidence and low self-esteem will set in. However, allowing negativity take a hold of you will hinder progress. You need to get passed it to make sure you aren't deterred from future endeavors.
Your ability to visualize positive thought is what will prevent you from failing. Positive thought is usually the driving force behind building a successful business, so keep your head up and keep going!
Insufficient Cash Flow
Cash flow is the life of every business. Insufficient capital can kill even the most profitable idea. If there is insufficient money and the company is finding it difficult to access funds, this will certainly obliterate the startup.
Ensure you have a business model well planned out with adequate cash flow for sustainability. Otherwise, the 90 percent await.
Poorly Drafted Business Plan
A well written and properly outlined business plan will go a long way in shaping decisions and staring the wheel of progress of your company.
The absence of a business plan or a poorly drafted copy will give way to failure. Getting a professional to translate into plan your business idea will go a long way in helping you achieve the needed progress and avoid failing.
Absence of Entrepreneurial Knowledge
This part is a no brainier and every business person or entrepreneur should at least have a decent knowledge of some skill relating to what he or she intends to build.
This will allow for speedy understanding when things are going wrong. However, a lack of know-how is a call for colossal failure. And that's what you're trying to avoid.
Read more about the woes of startup failure on TechCo
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