Sustaining the business till the last is perhaps the most difficult phase for any Entrepreneur, as there are too many obstacles, uncertainties and challenges involved in the journey of an Entrepreneurship.
Strat-up is not emotion game, but a strategic planning requires to make it successful. In order to make it successful, team should know the history of start-ups landscape.
Reports says that approximately 90% of Start-ups put downs their shutters within five years of its inception due to unable to scale it up, unfavourable market conditions, chaos in decision-making, poor planning and other factors.
Although, “Why most of the Strat-ups (often) fail?” is subject matter of detailed deliberation and discussion, I am trying to cut long story short in below points.
1. Lack of Research:
A thorough market study and research is pre-requisite before implementing the idea into business, which should not be ignored. Fail to do complete research, how Industry-players working on them, may amounts to failure.
2. Ideation Failure:
The concept of business model should be clear. Chaos in generating and developing ideas may lead to failure of Start-up. The base of initial phase of business should be well-defined.
3. Un-organized Team:
Forming synergy is team-game. There should be well-placed policy relating to the functioning of each one in the team, failing to which again make things unclear. The members of team should be clear as to their functions to make start-up bigger picture.
4. Unable to secure funding:
Business cannot breathe without finance. Not having adequate fund or not able to secure funding from market or Financial Institutions, required for the ideation or expansion of venture, will not make it sustainable even for short time.
5. Unfit product line:
Your product should be aligned with market needs. An unfit product or service will not have any revenue generation or profit-making potential, consequently, an ultimate failure of business. Selling hi-tech, cost-effective coolers in an area of extreme cold for entire year is example of an unfit Product.
6. Adoption of modern technology:
Not able to induct latest and advanced technology in your business, in these era of cut-throat competition often causes business failure. Utilization of AI, ChatGTP, Digital marketing, Online presence of product, and other business tools and techniques necessary to adopt to upgrade your product.
7. Regulatory compliances:
Government’s strict norms, legal obligations and lengthy procedures sometimes makes it difficult for Promoters to run the business or expand it. Heavy compliances, sometimes, does not allow business to go above and beyond. In my view, “ease of doing business” is still an imaginary concept.
8. Change in fashion/taste:
Change in fashion or consumer’s taste is very fast pacing factor. Not making necessary strategy to cope of with changing trend will throw your business out. Many start-ups cannot adapt change. Cloths, Jewellery, fashion and technology businesses often suffer due to it.
9. Pricing Factor:
Pricing or cost effectiveness plays significant role in Business success. If your products/services are not budget-friendly in the industry you are doing business, or the consumer class you are offering your products/services, they have many options in market for same requirement, Hence, fixing prices is also factor causing failure.
10. Disagreements between the partners:
To take startups at its pick in this competitive age is teamwork and handwork, but there often comes disputes and disagreements between the partners due to money contributions, profit sharing, put on of efforts, mismatch of thoughts so on, so forth.
Conclusion: If you go back and study the factors behind failure of Startups, points discussed above will trigger. To make it large, the entrepreneur must know the reasoning behind what he wants to deliver to its potential customer.
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Disclaimer: The views expressed in the Article are author’s personal opinions and does not form any business advice or solicitation.
The Author is Company Secretary and can be reach at: Phone No.: 7721090960 | Email Id: csanandjain@gmail.com
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