Business

The Reason Behind Why 90% Startups Fail

why startups fail

At the beginning, every startups think they are building the next big thing but in reality 90% of them fail. As they think they will get success at the first step of their business but it is very necessary to understand that there might be various stages of the entrepreneurship when they have to face the failure. Are you one of them? If yes, here are the few reasons behind why startups fail:

startups fail
  1. No Demand in the market:  As there are various companies who think that their idea is very exciting and everybody would love to approach them and money will begin to flow in the business. During the whole process, they forget that their products might take some time to be on that position in the market. If you want to reduce the failure and market rejection risk then you can validate your product in experimental projects before launching to see the reaction of the market whether they are liking your product or not.
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  1. Legal Aspects Ignorance: Completing legal aspects are very necessary to run a successful business. It includes basically right business structure i.e. private limited company or partnership firm etc. To establish your business in the market, it is very necessary to have a proper business structure.
  2.  Lack of skilled team: To run a successful business, it is very necessary to have a good management team. A skilled team plays a vital role in achieving the success of the business. So choose team very wisely as top talent is cherished by the media. Each organization has their own mission and vision so it is a duty of the employee to contribute his 100 percent.
  3. No more cash burn: Heavy cash flow leads to low – profit margin , high payroll costs, high churn rates, small recurrence purchase etc. So it is necessary to avoid cash burn as much as possible.
  4. Inability to raise capital: Every business requires money to grow. In order to raise capital, entrepreneur approaches outside investors to invest in his business but there are several times when investors don’t believe your idea and are not ready to invest fund in your business.

There are several stages when entrepreneur has to go through to get success. He will have to fight continuously to get the average results. Always choose success over failure. You will definitely get success if you avoid all the mistakes mentioned above.

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