Launching a startup is an important, life-changing decision. Building a successful business takes a lot of time, effort, and resources. It is very hard to endure failure when the project in which you have invested everything is closed before entering the market. It happens more often than you think. Statistically, most startups fail before they hit the market. If you decide to launch your project, you must be ready for anything! Let’s look at the most common reasons why startups close and how to solve them!
Come up with a unique idea
Those who launch a startup for the first time think that the main thing for a successful business building is to come up with a unique idea. This is not entirely true. An idea is not yet a business or even a startup. This is just an intangible thought in the head, which may be erroneous. Until an idea starts to make a profit, from an economic point of view, it is worthless.
Think about all aspects of a startup
Do you have an interesting idea? Do you think it can bring money? Excellent! But you must understand that the development of a startup is complex and multifaceted work. Business in any field requires skills, knowledge, understanding of processes, and the ability to overcome various difficulties. Accordingly, every startup leader must understand that it is physically impossible to become a millionaire right away. To achieve the desired result, it is necessary to go through many stages of implementation and solve many problems.
A startup does not guarantee success. A successful business is always hard work, finding and implementing new methods of work and development. Therefore, you must have the skills, knowledge, and stress tolerance to lead a project. Do not forget about self-development. Startup development is always a movement and a search for something new!
Successful development is possible without prior planning
Another newbie mistake. It is not enough to come up with a name, make a website and assemble a team. A business won’t start working, make a profit and grow steadily on its own. It’s like fantasy. Moreover, mistakes made at the first stages of development can play a cruel joke and destroy the entire project in the end.
Analyze the market, competitors, and target audience
Before launching a startup, analyze a lot of information. Draw the right conclusions and take them into account when implementing the project. First, pay attention to the market. What are the trends in your chosen field of activity? Is the market filled with offers? Is the market rising or falling? These and other questions will help you choose the right niche for further action.
Competitors are the second category of the important information you should study. Analyze the work of successful and unsuccessful examples. What are their advantages and disadvantages? How do competitors attract customers? Do they have any unique offerings? Which one you could develop and use? When you enter the market, you should already be offering better and more interesting products/services than your competitors. Otherwise, it’ll be very difficult for you to take your place in the market. You’ll have to fight with those who are already working on it and have enough experience. You just have to go through everything.
And finally, the target audience. These are the people, for whom you are starting the whole event. You must analyze and draw up a portrait of potential customers. Their age, gender, hobbies, etc. What problems does your startup solve for them? Will people be willing to pay you? The results of all analyzes must be taken into account when drawing up a business plan.
Wrong organization of teamwork
An effective team is the foundation of any successful business, which is especially important for the development of a startup. Properly organizing a team is not as easy as it seems at first glance. It is even more difficult to create a friendly unifying atmosphere within the team to increase the productivity of employees. Therefore, the introduction of team-building methods has recently become so popular.
The main mistake of many managers is the unwillingness to listen to their employees and a dismissive attitude towards them. Because of the position you hold, it may seem to you that you know everything and are doing the right thing, so you should not listen to the advice of employees.
Use corporate tools for business
All your employees are a friendly team. It shares common goals and aspirations. It doesn’t matter who holds what position. Each team member should be able to turn to any employee for help and advice. Everyone should feel like part of a single whole. It is important to listen to your team and show the importance of each employee. Unite people into a strong and successful team.
Today there are various tools for organizing and optimizing teamwork. We are talking about corporate messengers and task managers such as Microsoft Teams, Slack, and Jira. Such applications have all the necessary tools to create a remote team. Work effectively outside the office. Save money, it is better to spend it to promote the project.
Communicate in private/public chats, discuss ideas in video conferences, edit documents at the same time, and much more. If standard features are not enough for you, use third-party integrations. For example, Microsoft Teams SMS provides new opportunities for communication with team members, partners, and customers. Use them and grow your business the right way!
Lack of resources
Very often, novice startups try to build a “spaceship” and therefore go bankrupt. Yes, the lack of resources is the main reason for closing projects. But the reason here is not only the absence of millions. Properly allocating and investing available finances is just as important as leading a team. Unfortunately, most people are financially illiterate. Hence the resource problems for most startups. Nevertheless, you can successfully start and develop your business with a minimum of resources, the main thing is to skillfully distribute and invest them.
Look for different ways to finance
Today, finding funding is not as difficult as it was 5 years ago. In those years, in fact, the only source of funding was a large investment and venture funds. But everything flows, and everything changes. Today you have various ways to attract resources to your project. As already noted, it is important to be able to use the available finances. So try to save and not waste money. For example, for teamwork, you can use free versions of popular corporate platforms.
If you have exhausted your reserves and there is nowhere to allocate the necessary finances, try to look for them in the market. The main condition for attracting third-party financing is to interest potential investors. You’ll find them at themed events or hackathons. Launch an engaging startup presentation on a crowdfunding platform. Try to meet and interest a business angel.