10 reasons why Startups fail in India
Starting up a business can be hard. It is a fact that 90% of them fail within the initial three years. Smart entrepreneurs often learn from others’ mistakes and try to avoid them themselves.
Here are the top 10 reasons for why a startup fails in India
1. Market Problems
The market drives every startup. Market has an opportunity gap or an unsolved problem which your idea can fulfil and eventually make decent money in the process. However, identifying correct market and problem is not easy. If you consider a problem whose solution already exists or that problem is non-existent, you risk losing your effort and resources into failure.
2. Business Model Failure
Business model is the skeleton of every business. A few companies are so much involved in the solution that they miss out the business model. An inefficient business model is characterised by high cost to acquire a customer, having no scalable ways to acquire customers, and low or unknown lifetime value of customers.
3. Poor Management Team
Management is undoubted the most significant part of a company. Poor management results in weak strategic decisions and communication gap between management and team.
4. Running Out Of Cash
Cashflow is significant to keep the business alive. No matter how passionate you are or how great your solution is, you still need to pay money to your employees, marketing agencies and clear your bills. A few entrepreneurs fail to keep a record of accounts and fail to take adequate measures on time.
5. Bad Product Experience
In case your product has a bad interface, takes more click than necessary, or takes too much time to process, then it will become very hard for you to gain an upper hand in the market. Your clientele should be able to differentiate your product from competition from its value as well as the experience.
6. Poor Marketing
Even a great product can fail if it is not backed up by adequate marketing efforts. Marketing is not limited only to spread awareness, but it is about creating marketing elements within the products and exploring venues including influencer marketing, retargeting, and more.
7. Lost Focus
Sometimes, the founders get carried away with the ideas. This can lead to distraction and waste of resources. In this way, they tend to lose the focus and thus, hampering the business.
8. Disharmony among team members
Disharmony is an inevitable trait of humans. When it comes to building a business, self-centred and overly emotional behaviour can lead to conflicts, which can destroy the company culture and lead to its ultimate failure.
9. Legal Challenges
Once a business grows, it is exposed to many legal challenges. Each practising area has different governing laws and startups should be aware of them.
10. Bad Debts
Gradually, working on credit makes conditions worse for the business. Initially, it is often difficult to avoid credit requests. In such situations, if the client gets mischievous, it is your business which suffers. Knowing these reasons will make you aware and help you avoid them as much as possible. To be successful in establishing your startup, avoiding these factors for failure becomes a significant task at hand.