4 Tips To Prevent Start-Up Failure

Prevent Start-Up Failure

Start-up failures are not new for entrepreneurs who have been in the world of online business for quite sometimes now. According to a report by Moya K. Mason, approximately 50 million start-ups are launched each year throughout the globe. However, the number of start-ups going out of business each year too is closely the same. There has been a constant struggle by entrepreneurs and venture capitalists to prevent start-up failure. But the increasing pressure on start-ups to be unique has made many businesses collapse.


A study by Forbes states that almost 90% of the start-ups launched fail each year. The remaining 10% are able to prevent start-up failure and stay afloat. Most of the reasons for start-up failures are bad entrepreneurial decisions or poor business ideas. Competitors too have been a major player in putting start-ups out of business.

Also Read: 5 Successful Startups By Women Entrepreneurs

To prevent start-up failure is a challenge. The huge number of start-ups emerging each year are often competitors with homogeneous products or similar business ideas. In such cases, businesses with a powerful financial backup or a really strong business idea are able to survive while weak businesses perish easily. Here are few reasons why start-ups fail and tips to prevent a start-up failure.

1. Not sticking on originality

When it comes to start-ups, originality and exclusivity are the prime essence for success. A start-up can dream of succeeding and making it big only when the idea of the business is genuine and not duplicated.

However, it has often been observed that start-ups tend to divert from their original business ideas with the progressing time. This can be due to a number of reasons and may lead to start-up failure. The chief reasons include increasing the customer base, for improving ROI or simply adapting to the changing environment. The latest element can be a boon for your start-up as adaptability is the chief feature of business. However, other reasons may altogether end up entirely altering your line of business. This can be bad as you are unable to stick to your original plan of action for your business and accepting change when you feel is beneficial. This indicates that your business idea is not powerful enough to be executed.

So as to prevent start-up failure, certain changes and modification might be necessary to adapt to the changing business environment and market condition. It is necessary that an entrepreneur stick to his basic business idea to prevent start-up failure.

2. Ignoring organic responsibilities

You do have a powerful team of developers and a strong marketing team as well. But is recruiting the best of the lot the sole task? For a start-up, responsibilities are much more widespread than just the designation itself. A single person needs to observe and carry out multiple roles for a start-up to succeed.

Tips To Prevent Start-Up Failure

For a start-up, segmenting the business is not a very positive idea. An entrepreneur needs to look after each and every segment of the business to know the basic workings and framework on which his business stands. Thus ignoring any single section can prove to be detrimental. You may prevent start-up failure by checking this at an early stage.

3. Failing in word-of-mouth marketing

Word of mouth marketing is one of the most viral forms of marketing. It is quick to spread and reaches to the maximum number of target audience. A single satisfied client has the potential to bring ten more if he/she is happy with your product.

Start-ups often fail to recognize this. While focusing on increasing the number of customers, it is also important to retain the ones that you already have. Many businesses in order to increase their customer base ignore present customers resulting in customer attrition.

Try and learn their needs and preferences. Ask what they feel about your business. Seek their suggestions. A proper feedback can be immensely helpful in improving your business and prevent start-up failure.

4. Your company is not growing

Entrepreneurs crave quick growth. Every entrepreneur dreams to reach a 100% profit level and a huge turn over each year. While some may think it to be impossible to achieve, a good business idea executed at the right time would supercharge your business growth.

The right idea, at the right market to the right audience at the right time would inevitably take your business where you want it to reach. Super-fast growth can be achieved by start-ups if they have the correct market knowledge.

If you find your business stuck at a particular stage of growth for a long period of time, you are probably neglecting or overlooking few major elements of business. A thorough market analysis and study of the demand and needs of the target audience is an absolute necessity. These analytics help you to understand the market structure and status. This also helps to prevent start-up failure.

With a thorough knowledge of the market, a start-up can expect to grow quickly into a successful business.

Studies suggest that almost 90% of the start-ups that launch tend to fail. However, entrepreneurs must bear in mind that rather than giving up on failures you can treat them as lessons. With each failure you will have an improved knowledge so as what to do and what not to do the next time you launch a business and prevent start-up failure.


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