10 Reasons Why does a start-up fail?

10 Reasons Why does a start-up fail

There are a large number of start-up fail every year. But most of them won’t stay long. Why so? What are the primary hindrances to them? Following are a few reasons.

 1. No Research

They will not do a market analysis and financial research. They straight away from some company or LLP and jump into the industry.

 2. Poor Execution

There is no absence of concepts, there is poor execution. They will not start functioning. They will remain for a perfect start! A perfect beginning never comes! Whenever they initiate it will be the perfect start.

 3. Multi-tasking attitude.

Most of them will have some other employment. The start-up will be a side company for them. They will not show the same interest they had at the beginning of the project. They should have an appetite. They should be concentrated to earn the bread and butter from the start-up, then only that start-up will start working.

 4. Shortage of capital

Most of them will have the right ideas but they lack financial support. Start-up fail to form a better document of investors, executors, and pioneers. There should be the perfect combination of all. They have to work in the demand and finance.

 5. Over expectations

Too much expectation from the assignment is a big cause. They will suit up for the project with costs over and above the need. There should be financial attention to start small with the available fund. Once they start working they can show their operational efficiency and can draw investors. Why does an investor blindly support an idea which not yet executed? So let’s begin!

 6. No or less focus on Networking

They will not try to focus on making the network. Reaching the crowd is the mystery to success!

 7. Losing hope at Introduction Stage

Most start-up fail at the introduction stage. They will not remain to reach the growth stage. Initial failures, ups, and downs are expected in business. One should not disappoint.

 8. Diversification at the wrong phase.

One should diversify his process only if he reaches the maturity stage of the earlier product. Diversification in the wrong stage will cost more and end the whole scheme.

 9. Ignorance of cash flow

Individuals will focus on profit and loss statements and balance sheets. No one is troubled about the cash flow statement. A cash flow statement is a needle of financial health.

 10.  Serving or selling to defaulting customer

If sales or service is continuously given to a faithless customer that is a waste of resources. Which will push the task to financial loss. And start-up fail at their initial stage.

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