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42 percent of Startups Businesses Fail

By Alaa Aly

Reasons that make Startups Businesses Fail

 Starting a business offers all sorts of pitfalls. Big ones, like running out of cash or running into legal issues, are hard to ignore. But in the midst of the long nights, major decisions, and mountains of paperwork, it’s easy to miss little things that can make a major difference in the long run.

  • Failing to do research

A CBInsights study shows that 42 percent of startups fail because they don't address a market need. Tackling a problem that’s interesting to solve may be fun, but it isn’t a path to success.

Before you invest in your business idea, ask yourself what problem your service or product is solving. Then, discover through research whether that problem is common enough — and painful enough — for consumers that it warrants a solution.

  • Not setting expectations

Once you've established a product or service, you still have to set customer expectations. Being clear about what you’re offering and the outcome customers can expect is key.

Think through not just the sales process, but also your entire service. If you were to book a TV-installation service, you might expect them to mount the TV, connect all the cables and demonstrate how it works. If the installer only plugged the television in, you’d be a disappointed customer. Get on the same page with customers before they buy.

  • Leaving data on the table

The launch of your business is the best time to start collecting data. Recording everything from customers' demographic details to customer-acquisition costs to your inventory depletion rate is essential. 

Decide on which metrics you want to track. Speak to team members about which numbers they should be monitoring. Ask them to add those figures to your database or spreadsheet.

  • Overworking

As an entrepreneur, you set the pace. The rest of your team looks to you to set boundaries. Prevent burnout by establishing a culture of taking breaks, eating well, and getting plenty of rest.

Research published in Harvard Business Review found timeboxing to be the most useful of 100 common time-management hacks. Timeboxing entails “chunking” the day into 15- or 30-minute blocks and assigning a specific task to each. And make sure to timebox both your work and personal time. Treat making dinner with your family as a time that's just as important as an investor meeting.

Reference
  1. Harvard Business Review
  2. A CBInsights
  3. https://www.entrepreneur.com/
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