Warning! – Startups Are Failing Because of These Issues

It’s a known fact that only 10% of startups continue on to become profitable businesses. Why Is this? Well, it’s because there are some common mistakes that new companies are repeating that is causing them to become unviable. To find out what they are and how to effectively deal with them read on for some useful advice.

Business Plan

reasons why startups fail

Firstly, before you can get any funding or investment for a startup company, you will need an effective and concise business plan. The main issue here is that people are not realistic with what they predict for the first few years of business. Remember it’s very unlikely that a startup will be in profit from the get go. In fact, you can wait 2-3 years to see a healthy profit from a new business.

If your business plan does not reflect this, your investors will question why. They will also ask you why you think that you can make money in that space of time, where others have failed.

Another issue is that some startups are not accurate enough with their business plans. They don’t seize all the opportunity that are available to them. To those that finance your project, they will want to see you put forward a confident and knowledgeable plan. They will require you to explore and exploit all opportunities for revenue.

For example, say you have 100 hits an hour on your website, but only 2 of this convert into sales. They will want to know why this is, and what you will be doing to address this as you have 98 unexploited leads that are going to waste.

Startups Are Failing Because of These Issues

The moral of the story here is to know your figures and systems well enough to be able to get the most out of them.


 Startups Are Failing Because of These Issues

Next, any good owner or manager knows that the most important thing in your business is the people that are on your team. It’s vital to put time and resources into getting them to work well together. In an office environment, there are often many different personality types. This is a good thing because they will be able to see your business in different ways. However, it can be difficult to encourage healthy and useful communication between people that think in such a varied fashion.

You can try team building days or encourage a social culture for your business outside of work to strengthen the bonds between your team.

It’s also essential that you encourage and recognize individual achievement and commitment. If people feel valued and appreciated they are much more likely to work harder without having to be externally motivated.

You can do this through a bonus scheme, increase amounts of holidays or wages. Remember that your staff is one of your most important resources. It should be a two-way relationship, so if they do something to benefit you, try and repay the favor, within reason.


Another grave mistake that startups often make is with IT. Its surprising as a lot of startups utilize IT a great deal. This is because they can reach a broad audience without dealing with the overheads of retail shops. However, like any resource, IT need to be used in an effective way.

Startups Are Failing Because of These Issues

If you have systems that are redundant, or that are over complicating tasks, then you’re paying out for things that are making your life more difficult. This is why it’s a good idea to get an IT audit done by a company like Delta Comtech. In this way, you can make sure that every piece of technology in your enterprise is working towards making your business profitable.


Another critical issue with any start up is the supplier that you choose to work with. If you are manufacturing a physical product, then it’s essential that the elements you need be reliable and available in demand.

Startups Are Failing Because of These Issues

Even if you are offering a service, it’s vital that the companies that supply your essential utilities are available when you need them for support issues.


Another issue that startups often struggle with is defined roles for their employees within their business. After the redundancies of the economic depression, people have become used to pitching in and doing whatever has been asked of them. In fact, it has turned into a bit of a ‘yes culture,’ where people feel they cannot say no to being overloaded. Even if it is detrimental to their core role in the company.

Start up bosses need to be aware of this. As there is nothing that makes people unhappy in their work more, than feeling totally overwhelmed with not enough time to get done what they need too. To address this, it’s a very good idea to have specific work roles, with a corresponding job description and try to stick to that as much as possible.

FG Editorial Team
The Founder's Guide Team - Asian Associates with dynamic elements out to make a change.Thank you for visiting our site! If you do have any questions or inquiry, feel free to contact us through our links and please don't forget to follow our social media accounts. It would be our pleasure to help you in any way we can. Always Remember: "Proceed to Succeed". Hoping to hear from you soon!

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