Many will believe that a considerable percentage of startups fail in their first year. And you could just imagine how much time, effort, and resources wasted each year as some startups would slowly go downhill. A startup has two characteristics: growth and innovation. A startup can either expand and open new branches as proof that it has become successful or innovate by testing new processes, products, or services to grow.
As I always reiterate in my articles, starting a business is truly not as easy if your heart and mind are not in it 100%. Thus, several factors contribute to the failure of startups in their first year of operation.
1. Lack of market-fit – It is of utmost importance that an entrepreneur develops the right products for the right market. It is incredibly costly. Thus, somebody should do carefully before designing the products.
Solution: Focus on what problem needs to be addressed and not concentrate on what other businesses offer. If you want to provide unique products to the customers, ensure that it is worth their money and supported by consumers.
2. Marketing problems – Let’s say that you have successfully developed products which you think would be a massive hit among teenagers to young adults. But how would this news reach them if you would just rely on walk-ins? Having a shop inside a well-known mall might be helpful. However, you need to create a noise for customers to flock inside your shop.
Solution: No business should be without any marketing efforts. Otherwise, your business would not even survive the first six months. It would mean having to shell a certain amount of money. And so, with this, you should be able to come up with an excellent marketing strategy that would entice customers to purchase your products.
3. Problems within the workplace. It is not uncommon for people to have some disagreement from time to time. However, it may be unfortunate if your employees do not respect one another or simply would just not want to work as a team.
Solution: First and foremost, before hiring employees, they should be fully aware of the responsibilities of the post they are applying for. Second, they should be mindful that a single person does not run the business but should always be a team effort.
4. Financial Problems – One massive mistake of entrepreneurs once they see that money is starting to come in is spending the business’ earnings for personal expenditures. And to continuously do this would mean failure to continue operating the business.
Solution: As an entrepreneur, you have a share of the business’ profit. Set a certain percentage from the net income to ensure that there is still enough money left for purchasing new stocks, paying taxes, rent, and salary of employees.
5. Technologically Challenged – We are living in an era of digitalization. Not being able to use these valuable tools or resources may make your business a step behind. On the other hand, some would instantly adopt new technology but fail to understand maximizing its ability to become an asset ultimately.
Solution: Let someone do the upgrading of your system if you have difficulty. You should not let yourself fall behind because customers want answers immediately.
6. Legal Problems – Some businesses think since they are just a “small” entity, they should no longer be obligated to secure permits and other requirements. Every entrepreneur should understand that once they put up a business, they should ensure that their business is registered and follow all policies about the operation of their business.
Solution: It is essential that before starting the business, should understand all legal matters, be given priority, and adhere to all government policies to avoid business interruptions in the future.
How Do You Prevent Failure from Happening?
1. Take some time to talk to consumers and know their needs which they find difficult to find. Find the right target market before entirely investing.
2. Consider creating a prototype before mass-producing your products.
3. Keep in mind that being in any kind of business entails a certain level of risk in which you should still keep yourself the same despite failing. Similarly, a small bump should not mean becoming burdened financially right away.
4. Understand that as you start your business, this would take your take away from the usual things. However, this should not mean that you need to keep yourself away from your loved ones completely. Thus, learn to have a work-life balance.
5. Create a team that can genuinely work together and share your vision so that you can reach your goal in no time.
Startups can be risky, but this would also mean having the potential to become successful too. The benefits are not just looking at it on the financial aspect but providing what is needed by the market and providing jobs to your employees.
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You may contact Armando “Butz” Bartolome for questions and more information.
By email: aob@gmb.ph
FB Page: Armando Bartolome
Linkedin: https://www.linkedin.com/in/franguru/
Website: https://www.gmb.ph
