Startup Advice

There are so many dangers associated with starting a new business which one can read about in gory detail in business publications, websites and blogs galore. There are all types of reasons why so many startups fail. Some fail early on due to a lack of funding while others struggle for years without making it to the point where they break even. History tells us that across all industries, the majority of new businesses fail within the  first few years. Some flop right away while others enjoy some fleeting success before fading and dying away into oblivion.

In the startup world, the “valley of death” refers to the high probability that a startup will die off before it establishes a steady stream of income. So how do you avoid the valley of death? By knowing the main controllable reasons for startup failure, that’s how.

Read on to discover the top three controllable reasons why startups fail. Then laser-focus your efforts on making sure you don’t make the same mistakes so you can proudly boast one day that you were one of the successful startups that defied the odds!

A Lack Research and Planning

Startups that do not have solid business plans and a clear understanding of what their target market wants are doomed to descend into the valley of death. Even though there is tons of information and advice out there in the form of business blogs and websites warning startup founders of the perils associated with a lack of research and planning, many businesses still forge ahead without doing the required market research and planning.

Successful businesses routinely conduct research so they can identify and understand their target market, set realistic goals and develop effective marketing strategies. This research is done to help plan for future growth and for identifying future business opportunities. Don’t think you can somehow “get by” without first doing good research and planning because the truth is you can’t.

Poor Money Management

There is nothing that can kill a new business faster than a lack of money. Whether you spend money like a maniac during the early stages or fail to raise enough money in the first place, you cannot be in business if your finances are a mess. Even if you’re pledged to move on no matter how poor you may be in the early stages, you simply can’t make it if you have no clue about managing money as no business can survive paycheck to paycheck. There are just too many financial obligations to cover so either teach yourself to become an accounting ninja or go out and hire one.

Hiring the Wrong People and Not Being Able to Lead

You can have the best idea since sliced bread and enough money to keep you afloat but your business is going to flop if you don’t hire the right people. Even if you do manage to put together a great team of talented and enthusiastic people to support you, you will still fall on hard times if you fail to take a strong leadership role as you’re bound to lose control of your entire business. This is why successful entrepreneurs harp about the importance of hiring slowly and firing quickly as you simply must have the right support people in place in order to succeed. And, if you cannot step up and be a true leader, even the best employees will fail to deliver wherein you’ll miss the mark completely when trying to meet both your short-term and long-term goals.