You might be surprised to know that quite often, it’s a lot more than just the financial situation of a startup that causes its failure. Gen George, Founder and CEO of OneShift attributes the majority of startup failures to the fact that entrepreneurs give up on their idea rather than making revisions and taking the necessary steps to improve the chance of their business to succeed.
Lack of passion for the product
Similarly, there will probably be someone who is passionate about the type of product you’re producing. It’s very easy to tell when a love for your own product or idea is lacking, and that lack of passion will be evident in the business performance.
Your team isn’t great
The team that’s going to launch your idea plays as big a role in the business as you do at this stage. Investors will look into each player and their contribution to the business before even looking at what that business can be.
Your leadership skills are lacking
The first thing potential investors will look at is not your idea or product- it’s you. If you can’t provide evidence of strong leadership skills and entrepreneur qualities, they’ll look no further.
Lack of expertise in the field
If the industry you’re entering with your new venture is one that you have no experience in and no idea about, it’s almost certain that you don’t have enough insider knowledge to make it work. After all, there will likely be someone from within the industry who’s already thought of your idea.
Your product needs improvement
It could be that your product or service isn’t up to scratch. If this is the case, then it’s possible to fix the problem if you’ve realised the issue in time. This is why it’s so important to maintain an effective system of monitoring business activity.
Failing to invest wisely
If you’ve managed to secure the startup capital, be smart about where you invest your money, i.e. blowing half your budget on a TV advertising campaign is nothing short of unnecessary in this day and age.
You run out of money
Make sure you’re raising enough capital to build your product, achieve your proof of concept and carry the business forward for at least twelve to eighteen months. When you determine your budget, remember to double the amount of funds you anticipate you’ll need, just in case. Because something always comes up.
You have no mentors or advisors
Entrepreneur should not be at it alone. It takes good advice from an experienced teacher to point you in the right direction. Make sure you have a good network that allows you to identify and be surrounded by people who can pass their learning and experience on to your business, so you don’t repeat their mistakes.