5 Things to Do to Avoid Startup Failure
We love to read about successful startups like Facebook and Amazon. The stories behind their success are inspiring and give us hope that our ideas can also become profitable businesses. However, we’re also aware of the hundreds of startups that launch yearly, and sooner or later, the hype around them dies and they fail.
Recent statistics show that 70% of startups fail two to five years after launching. Reasons for failure include inadequate funds, failure to provide value, and poor management. Are you afraid of launching a startup that will fail? Here are five things you should do:
- Provide Real Value
One of the primary reasons startups fail is competition from businesses providing similar products. Your startup needs to provide real value to customers so it’s considered irreplaceable. Identify something that makes your products or services unique and capitalize on it.
You can go a step further and introduce an original product that solves customers’ problems—that no other business provides. You’ll disrupt the market with your innovation. For instance, Uber introduced an online ride-hailing platform, giving customers a totally new service. People started hailing cabs from the comfort of their home or office.
- Keep Learning
Warren Buffet is one of the most successful entrepreneurs in the world. He gives sound advice about continuously learning to sustain your business. He says people should “go to bed smarter than when you woke up.” The Berkshire Hathaway CEO reveals he is also an avid reader of self-help and business books, and this has made him successful.
Avoid having a know-it-all attitude. Learn from mentors, enroll in a leadership course, network with other innovators, and listen to client feedback.
- Raise Enough Capital
Did you know financial woes are the number one cause of startup failure? According to The Score, 82% of small businesses fail due to cash flow problems. Raise enough capital and create a detailed business plan before launching your startup.
If you don’t have enough savings, you can ask family and friends for help, apply for small business grants, or get a loan. If you can’t get a loan from a bank or a credit union, consider other avenues such as online lenders. You can get an online car title loan in a day or two, you only need to own a car with positive equity. A title loan has a short repayment period and has better terms than a bank loan.
- Have a Solid Business Plan
A business plan is a core component of a successful startup. It gives you a roadmap to follow and actualize your business idea. Your finances will be well managed, your plans will fall into place, and your goals will be clear. Be sure to include these sections in your business plan:
- Product or service description
- Marketing and sales strategies
- Competition analysis
- Financial projections
- Market analysis
The business plan is a strategic tool that will help scale your business. It helps you set goals and strive to meet them without getting distracted by emerging trends and other business challenges.
- Know What Your Customers Want
The old phrase “the customer is king” might feel like a cliche, but it’s true. Customers keep a business running, and if they no longer feel appreciated, they move on to another company. To avoid failure, serve your customer first before thinking about yourself.
Conduct surveys to learn what they want. Use social media to understand the preferences of your target customers—you can host a question and answer live session on Facebook or Instagram or read their comments under your posts.
We hope these tips will help you launch and run your startup successfully.
