Startup City Magazine

Causes of Failure in Startups

“Failure is the key to Success” says a popular quote, which is really apt for entrepreneurs; because they have to pass through this phase, in their entrepreneurial journey to achieve success. Though the anxiety is very much evident while establishing a business, one must also know how to tackle the problem of failure. Therefore, an individual’s attitude contributes majorly on how a startup functions. If the business functioning does not overshadow the strategies and plans made by a startup, a ray of positivity prevails in the management of the business; otherwise it may lead to financial losses and will adversely affect marketing skills as well.

The effective managerial skills help a startup grow towards its zenith, but at the same time if this drops in the graph, a limping growth will be the result, leading to failure. This means that it is important to place the right person at the right place and time. Similarly, it is required to know the commitment of the team members towards success of the team. Planning is a major factor once we think of future, and it should be kept in mind throughout. Therefore, a clear business strategy is important.

There is another major factor which leads to failure of startups, which is marketing. A website is very essential while establishing a startup.  Marketing is one of the main strategy to inform a person about the existence of a product or service. While informing, the techniques used in doing so is also very necessary. The right kind of marketing with innovative means of reaching out to the masses can be a turn on factor for a startup. At the same time, financial crisis is unpredictable in nature as it may arise at any moment. Therefore a startup should be ready to face financial contingencies.

When establishing a startup, it is very necessary to understand the source of capital. Itt might be from loans, from financial institutions like banks or other means of internal financing. A situation of debt should never arise when you start a company. Therefore, to ensure that the company is secure financially, there should be proper target accomplishments of the projects which have been taken. The company has to set a particular target to see its growth.

Therefore, keeping all the above things in mind it is necessary to have effective management, practicality towards matters of finance and innovative concepts involved in marketing so that these startups are recognized in the market leading to better prospects of the company.

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