The world of business has now recovered from the recession, and now, we are witnessing the real resurgence of entrepreneurial spirit which is in turn, increasing the startup activities all around the globe. Nowadays, we are seeing many features in newspapers praising the success of many startup organizations, but this bright part has a shady gray side. Trade experts always love to analyze the success of startups and in this search for glory, we intentionally or unintentionally ignores the companies who fell down in the journey. This article tries to give a list of reasons which play their crucial reasons behind the failure of many startups.
Unhealthy financial management: This is one of the most common reasons behind the failure of many startup organizations. Sometimes, in the initial days of operation, these companies will earn more revenue, and the top management may end up in spending money recklessly. Finally, they will end up out of cash, and this underfunding will pull them to the clutches of the financial crisis.
Worst customer service: Without proper customer service, no business organization can succeed; no matter it is a startup company or an established firm. A startup entrepreneur should always make sure that his company is giving the best possible service to its customers, and should try to solve any kinds of disputes.
Legal Challenges: Unexpected legal issues during the time of proper operation will destabilize the proper running of startups. To solve this problem, always make sure that you have a professional lawyer who can combat any judicial problems during times of legal emergencies. It is also recommended to follow all legal guidelines before starting the operations of your company.
Lack of enthusiasm: Many entrepreneurs all around the world start a startup just to earn money, and mostly, they do not have any passion towards the operation which the company is doing. This will surely result in traction, and the final result will be the closure of the company.
Lack of work-life balance: The happiness of employees have direct impacts in determining the success of any startups. Most of the startup organizations compel their employees to work on round the clock basis and this will destabilize the work-life balance among them. This imbalance will result in the lack of focus among employees, and they will fail to deliver their best.
Ego among team members: It is practically impossible to take a company to new heights with the efforts of a single employee. Building a business is always a team effort, and if ego builds among the team members, then it will disrupt the harmony which will finally result in a negative output.
Weak marketing: Sometimes, the product of a startup company will be impeccable in all aspects, but due to improper marketing strategies, it will fail to reach the doorsteps of potential customers.
Overconfidence turning to arrogance: Confidence is one of the best tools of a successful businessman, but things will not be that fruitful when confidence turns into overconfidence and arrogance. It is always recommended to control your overconfidence with the readiness to accept criticism, and it will fetch you positive results for sure.
Bad selection of location: Finding the right location is very much necessary to obtain the right customers. Bad location selection will drastically affect the sales goal, and startups may end up in a loss.
Partnership issues: Nowadays, most of the startup companies are working in partnership basis. Sometimes, disharmony will arise between co-founders, and it will destabilize the overall health of the company.