Fear of failure is why most people don't start their businesses. Throwing yourself out of your comfort zone by leaving a secure job to initiate a startup requires courage and self-assurance.
Failure is a must if you want to expand your business because you learn from your mistakes. Even the most successful companies have experienced startup failure during their first five years. Only 10% of businesses succeed without experiencing any major letdown. A startup is burdensome; if you are initiating one and want yourself to be counted in that 10%, We’ve got you covered. We'll take you through the common reasons why most startups fail and ten practical tips to avoid startup failure.
Reasons Why Do Startups fail?
1. Cash Shortage
One of the main reasons for startups' failure is the lack of proper funding. This may be due to the inability to find an adequate investor that funds the company until it starts generating its revenue. You need money to find the right product-market fit; your chances of success could be improved if you have cash in hand.
2. Lack of Proper Product Pricing
Finding the right price for a product is hard for a startup because their product doesn't have many comparable offerings. A startup needs to price the product high enough to cover the cost and make a profit while being reasonable for the customers. If the price is too high or too low, customers won't buy the product leading to startup failure.
3. Lack of Proper Marketing Strategy
One key reason startups fail is improper marketing strategy. A marketing plan is a driving force behind your sails; knowing your targeted audience and how to promote your product to get their attention is essential for any business. An excellent marketing strategy presents your product in front of a targeted audience you have selected, increasing their chance of buying it and ensuring your business's success.
4. Lack of a Business Plan
Lack of a proper business plan can be a reason why startups fail. A good product/service can get the audience's attention initially. Still, you need a strong business plan that provides a strategy for marketing, monetization, distribution, partnerships, etc., to ensure long-term success. A flawed business plan does not consider things that become essential later on, leading to start-up failure.
Tip To Avoid Startup Failure
Here are ten practical tips you apply to avoid startup failures.
1. Conduct Market Research
To prevent startup failures, any business's first step should be to conduct market research; it enables you to know about the market trend, the audience's demands, etc.
Market research sounds like an expensive project, but it's not. Conduct surveys and evaluations online to know customers' needs and preferences. You can speak to friends or family, search online for competing ideas, or ask people out through email or inbox. Collecting all the information can create an adequate business plan and ensure start-up success.
2. Take care of Finances
A startup can only take off if it's financially stable. To ensure finances for your startup, reach out to your family and friends; borrowing from them means paying lower interest. You can also apply for a bank loan on Interest.
Host a crowdfunding campaign to collect funds for your startups. Another way to finance your business is to catch the eye of a private investor; he will take care of your startup's finances until it starts generating profit but, in return, ask for a share in your company.
3. Get Feedback
One way to avoid startup failure is to identify and work on your flaws. It is the only way a business can improve and attract customers. Get your customers' feedback on your product/service to get their opinion on your product/service.
Send personalized emails, and conduct surveys to get feedback on your product. You can send posts of your product/service in private groups and query for reviews or ask on digital channels like Social Media, blogs, etc.
4. Be Distinctive
Image taken from strikingly’s user’s website
One of the reasons startups fail is the lack of innovation and distinction. If you offer a typical product, people are less likely to buy from you. Bring innovation and offer something different than your competitors.
To bring innovation research and reevaluate the market. Keep an eye on your competitors, know what they are selling and at which price, and what you can do to set yourself apart. Make use of modern software and technology to be more efficient and productive.
5. Set Realistic Goals
To ensure startup success, you must set realistic goals that you can reach with your current mindset, ability, and resources. Many startups set irrational goals they could not reach within a specific time frame, leading to demotivation and depression, ultimately leading to startup failure.
To set realistic goals:
1. First, evaluate your resources.
2. Have a long-term vision
3. Divide the ultimate goal into small pieces
4. Invest time and effort into achieving the goal
6. Hire Skillful Teams
Startups may have creative and talented founders, but they cannot handle everything. A team with diverse skill sets is essential for any business. Recruit team members based on communication-skill perseverance and problem-solving ability. With a good team for every department, e.g., sales, management, finance, etc., a startup can take off in no time.
7. Market Your Startup
Nowadays, a startup can only take off without proper marketing. Marketing enables you to divert the attention of a preoccupied audience toward your product. With an appropriate marketing strategy, a startup can reach its full potential.
There are numerous ways you can market your product and attract customers. Two of the many methods are marketing through websites and social media pages.
Marketing by Website
Image taken from Strikingly’s user’s site
The website ensures a healthy online presence for a startup. To market your product/service through a business website, ensure your site is optimized for search engines by including specific tags and keywords. Use google ad campaign to target a specific audience.
Social Media Marketing
Social Media has enormous potential when it comes to marketing. You can attract a massive number of customers on social media, decreasing the chances of startup failure.
Image taken from Strikingly Facebook page
Here are some tips for social media marketing.
1. Be consistent and post quality content.
2. Ensure you optimize your social media profile by including specific keywords in your profile description and posts.
3. Use social media ad campaigns.
4. Use social media analytics to learn how your target audience interacts with your posts.
You can also interlink your social media and website to exchange traffic between them, opening further gates for your startup. Strikingly allows you to do that within only a few minutes. With strikingly’s website builder, you can build a stunning website in a few minutes without any professionals involved. It enables you to add social media icons to your website's footer, interlinking it with your social media accounts.
How To Add Social Media Footers To Your Website?
1. Open your site editor and scroll to the bottom.
2. Click the "Edit" button you will see when you hover the mouse over the footer.
3. Here, you will be provided with two modes
Share: Use embedded buttons to let your audience share your site on their social media feeds.
Links: Allow your visitors to visit your social media accounts.
4. Check all the social media options you want to display and paste the links in the URL bar.
5. Click "Save" when you're done.
8. Maintain Healthy Customer-Brand Relations
Image taken from Strikingly users' website
Customer care is vital for any startup's success. Taking care of customers, providing personalization, and valuing their opinions can decrease your chances of startup failure.
Show your customers that you care, and be genuine in offering help; once people notice that you are dependable, they will trust your brand. Whenever you see a comment under your post, reply to it politely.
Another way to establish good customer-brand relations is by building an online community where you can communicate with prospects, promote your brand, and inform them about the latest updates.
9. Enhance Leadership skills
To avoid startup failure, personal development is crucial for any startup's success. With effective leadership, a startup owner can accelerate the startup's success and build effective plans for future profits.
Work on communication skills, listen actively, ask questions, and effectively channel all the teams' energies. Get them to think out of the box and encourage them if they do something acknowledgeable.
10. Scale Wisely
Premature scaling is a common reason startups fail. Excited to expand the business, startup owners proceed rapidly, running out of resources. To ensure startup success, scale yourself sedately. Take one step at a time. Have a long-term vision rather than rushing for short-term success.
Failure is a must if you want to succeed in life or in business, 800 out of 1000 businesses fail initially, but by using the tips above, you can decrease the chances of your startup failure.