We have requested the collaboration of some entrepreneurs who are engaged in businesses of all kinds on the Internet to compile a list of the main reasons that lead to failure of a startup. Many of these are valid reasons for any business that you are thinking of undertaking. Here is the list in order of importance:
1. Lack of a business plan
It is a very common mistake not drafting a preliminary business plan, not having a business planning. We’re not talking only about the document itself, we speak of knowing in advance how we’re going to make money with our idea, basic to any business.
It is customary for a group of technicians assemble a startup with no thought as to return the van. This planning will allow us to also have a roadmap that allows us to grow.
2. Mismanagement of resources
We have a startup capital that will allow us to start our business but we manage it properly. This problem is twofold:
Overexpenditures: Spending in an uncontrolled way and running out of cash. Performed unnecessary or poorly estimated the cost estimate (too optimistic). An entrepreneur can be very valid but led a project can be a disaster in its management. There is never enough money to do things, and if the project has a long development period, there is usually not enough funding to cope with no income.
Lock: We find that we do not know a capital management. We have taken between 6 and 12 months to get the funding and we set a goal once achieved we forget our main objective. We do not know how to invest the capital or if you really needed.
3. Choosing the wrong time
Launch your startup when the market is not mature, when the economy is not a good time (crisis) or when the market was saturated.
If you’re anticipating too much to this market can not yet prepared an example: Some mobile service companies have failed in the 90s.
In times of crisis costs are reduced and customers are scarce.
If you wait to launch your idea too many others have done already, and you’ll find yourself with a strong competition.
4. Bad choice of partners
The choice of partners is more important than what is usually thought. If you do not need not have, so easy. Try to undertake alone, you will have fewer problems.
A very common mistake is to turn a necessity in a partner, for example, a designer or a programmer is not a partner, is a recruiting service. Many of the members who are elected are dispensable. It is a mistake to believe that you can not start without them. You will have a stronger relationship with them than with your wife or friends. If there are conflicts could lead to failure.
The selection of investors is also very important. A person who gives money to a project will most probably not your idea of romantic. Its objective is medium to long term economic and other goals could not understand that you see as relevant entrepreneur (traffic, influence, market position) and generally just looking for a 100% profit and economic success.
Another important aspect, both with partners such as investors, is to make things very clear from the outset. Set either the original objectives, and intermediate outputs.
5. Lack of motivation
A Starup not created overnight, you need motivation, perseverance, ambition and patience. A lack of motivation of the team members will lead to failure. Bring to a successful startup to take much sacrifice and a long time to “lean” not everyone is willing to assume.
All equipment must be motivated and be 100% consistent, demotivate any of them will affect the rest. We must prevent the wear that produces a push sow doubt in the team. You must be ambitious and forward to your enthusiasm and your customers.
6. Lack of diversification and innovation
Little capacity to reinvent itself, to innovate and to turn your startup. Sometimes a startup remains stagnant or is marred by his competitors for not being able to evaluate your idea and realize that change is required.
An entrepreneur must be flexible about your idea, you must adapt to the times and make the changes necessary to not stall the project. It must be able to diversify when things are going well, and redirect the idea.
7. Lack of focus
For a startup function should be devoted to it 120%. Unable to take forward an idea with multiple threads in the open or free time.
8. Lack of experience
The lack of experience or professional enterprise and lack of knowledge of the targeted market are reasons for failure.
It is customary that the entrepreneurs have already worked for that market as employees and are fully aware.
9. Thinking of oneself
Confuse the customer or user with oneself, to think that will have the same level or the same interests as me. You must not mind that you’re producing a service to you, if not for your customers or users, who need to know and really want to be bf.
10. Lack of investment
Not being able to get the money needed to get the project forward or fail in finding investors.
Thank you for giving part of your valuable time.