Entrepreneurship is about to find an innovative solution for the daily life struggles of ordinary people. And being able to face failure, manage failure and succeed after failing,’ says Kiran Mazumdar, founder of Biocon. In 2019, 1,300 startups were initiated in India. But how many succeeded? According to News 18 reports, 90% of Startups were
Entrepreneurship is about to find an innovative solution for the daily life struggles of ordinary people. And being able to face failure, manage failure and succeed after failing,’ says Kiran Mazumdar, founder of Biocon. In 2019, 1,300 startups were initiated in India. But how many succeeded? According to News 18 reports, 90% of Startups were shut down in the first 5 years. But, Why Startups fail in India?
In a nation like India, over the past few years, the wind of startups is blowing everywhere. Make in India, startup India gave direction to a lot of youth out there. You can dream and transform the dream into reality.
Either it is an online business or in-office business, startups are taking everywhere. But why take a chance of failing, especially when it is a startup, the first venture of your life? Or if your startup is doing not so great, you can make it stand erect against all the winds of hardships.
A bit of knowledge mixed with a lot of hard work and attention holds power to help your startup from falling.
Let us dig a bit into some of the significant aspects of why startups fail:
#1 No Proper Research
Research has proved that the market’s insufficient and improper research is one of the primary reasons why startups fail. If one makes his mind of starting up a business, it becomes essential to do doctorate-level research of the market, funding, competitors, and every minute another element that might affect your business directly or directly.
Market research facilitates budding entrepreneurs to get aware of the market’s high and low tides very soon. It also helps in planning strategies to outshine the competitors.
#2 No Major Backup
The business policy clearly states that you have to spend it in the industry before your business returns you revenue. Especially when it comes to launching a startup, it is necessary to check the available funding options.
A proper economic backbone is fundamental as funding is the soul of any business. From requirements, visibility, licenses, insurance, incorporation, and every slightest of business elements comes from finance.
A question might strike your mind; the Government is already promoting startups via loans?
Yes, the Government is providing loans for startups, but what is your backup to fill the loans if your business does not bloom in the very year?
Find an answer and step into the world of commerce with excellent economic support.
#3 Improper Business Model
Your startup is not working because your idea is too outdated or too new for the current world. The strength of the startup is its idea.
The kind of business you are about to set plays a vital role in deciding a business’s future. Most of the time, budding entrepreneurs pick up a niche that does not work well for them.
So, it becomes imperative to spend a reasonable amount of time finalizing your business category and model.
#4 A Not So Good Relationship With The Employees
When you start a business, you hire people to turn your dream into reality. You owe them more than a salary, which is a good relationship in the form of respect. Your employee is the one who decides the longevity and productivity of your startup.
External and internal, both the public needs to be satisfied and happy with your service. Most of the time, the owner does not pay well or pay later, which dusts off the employee’s hard work instincts. As an employer, your public is your vital family who will bloom and groom your business, take care of them!
#5 Poor Marketing
I have the best business idea, economic support, good location, but why is my startup falling? Did you give a thought to your marketing ideas? According to commercial researchers, proper marketing is critical to establish a startup.
Marketing is essential as it brands your business. Create blogs, hire influencers, send emails, or sponsor an event, do not leave a single marketing stone unturned as to the more effort you put in branding yourself, the more your brand will add in your favor.
#6 Competition Ignorance
Well, name me a field where there is no competition? None!. Competition is everywhere, so what you work hard and win it!.
When it comes to startup competition, two cases arise. Either you take the competition too seriously or tend to ignore it at all. You might often find many existing and ruling businesses in your business field, which is why you step back. But there could have been a chance you would have done better.
The second case is there might be business doing excellent in the market, and the place might not be perfect to start freshly, but you ignore it, and all your money and effort go in vain.
So it is better to avoid both the situation and look for the situation and scenario to step in this commercial world.
The location where you are setting up your startup carves the path of your success. You might wonder how geography affects an online startup. But yes, it does change. The right location of your office will help you maintain the pace.
Imagine you set up an antique shop startup where the pope struggles to get two meals. Or imagine you setting your grocery business believer in an area where there are hundreds of grocery shops available.
In both situations, the place you choose will turn its back on you. So, it becomes essential to look at the geography, demographics, transportation, financial background, and literacy of an area before investing your dream business there.
#8 Weak Feedback System:
When you launch a product, this is obvious that it will have some defects. Big companies spend thousands of Rupees to get customer feedback so that they can improve their product as per the customers’ needs.
But, startups have this overconfidence that their product is of the best quality in the market. And so they don’t focus much on customer feedback.
Feedback not only helps you in improving the product quality but also establishes a bond between you and your customer. They think you have given them the importance and so they buy your product next time even if it has some defects.
#9 Lack Of Investment
Some startup ideas need less investment, some require high. But the investment is required in all types of startups at a certain phase.
Some startups have extraordinary business ideas and plans. But for whatever reasons, they don’t get investment and in the end, they have to shut. And lack of investment is one of the biggest reasons why startups fail.
For example, the Ask Me group had emerged rapidly at a time. After some time they got some issues with investors and due to lack of funds, they shut the startup.
But, keep in mind that you shouldn’t seek funds too early. You should go for investment only if you are sure that you’re ready to expand your business.
#10 Lack Of practicality
India is at a stage where youths are so excited about startup and undoubtedly many of them are full of creativity. But the only thing that makes a startup successful is its usefulness in real life and if it is able to make people’s lives easier.
Any idea like making a tunnel from the north pole to south pole won’t work. So, your idea must be practical.
Final Words For Why Startups Fail:
Your startup is your dream on which you are ready to sacrifice all the calm of your life until you hit the success. It becomes crucial to ensure that you do not leave a single step of yours. Just keep a check on all the above reasons why startups fail, and you are ready to transform your dream into reality, all the very best!
If you have any reason that you think why startups fail, Please let everyone know about it in comments.1 comment