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7 Proven Reasons Why Startups Fail and How Entrepreneurs Can Avoid Them

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Launching a startup it one of the simplest ways to kick off your own business. However, the fact that it’s simple doesn’t mean that it’s easy. Most entrepreneurs don’t realize this simple truth, which is why 90% of all startups fail eventually. If you are thinking about establishing your own company, you better prepare for it thoroughly. Startups can crash for a wide variety of reasons, so you need to understand how the process works and avoid common misconceptions.  In this post, we will present you seven proven reasons why startups fail and how entrepreneurs can avoid them. 

  1. Tough Market Conditions
A vast majority of startups fail because they don’t analyze the current market conditions well enough. First of all, you could be facing well-known competitors with loyal customers who don’t want to change the supplier. Secondly, your target audience might be too small to generate a substantial profit. Another reason to shut down the project could be product irrelevance – the idea might seem interesting at first, but it doesn’t inspire users to engage and buy your product. Each of these issues is a genuine startup killer, so you must think about the market conditions before taking any action.
  1. Funding Issues
A report shows that over 80% of startup funds come from the entrepreneur himself or herself, or family and friends. But if you accumulate the minimum amount required to kickstart the project, think about the scaling issue. Will you be able to scale the business even if turns out to be successful in the beginning? Most entrepreneurs can’t afford extra investments so soon, so they have to abandon a promising project.
  1. Low-Quality Project Description
It takes a great project description to avoid funding issues and attract those much-needed investors, but it’s not that easy to write a convincing startup presentation. Can you explain your ideas clearly and briefly? Will potential investors be able to understand the outline at a glance? If you can’t be sure about the project description quality, you better hire assignment writers  to help you out. They have years of experience writing project descriptions, so you can count on a flawless startup presentation.
  1. Poor Marketing Strategy
Contemporary marketing has a two-fold nature because it’s affordable to anyone but also highly complex. With so many communication channels and marketing tools, most business people don’t really know which way to go. Sometimes they can’t even find and approach the target audience or they begin promo campaigns too late. Startup owners often don’t know how to prepare a marketing plan, so they end up sending vague messages through irrelevant platforms. You should be smarter than that and locate your audience accurately. For instance, B2B startups can probably find prospects on LinkedIn rather than Facebook or Instagram. In case you can detect the target audience, you won’t have to spend too much money promoting your products or services. Therefore, you must plan ahead and think twice before making any moves.
  1. Money Is the Only Motive
Everybody wants to earn enough money to make a decent living. However, a big portion of entrepreneurs launch startups only because they dream of making a fortune. What they don’t understand is the fact that startups require weeks or even months of dedication and hard work, so they lose patience in the meantime.  If you are not passionate about this project, we strongly suggest you find another idea that really keeps you focused and motivated. That’s the only way to pass the initial period successfully and set the foundation for the profitable business.
  1. Interpersonal Issues
As soon as the first problems occur, new teams begin experiencing interpersonal issues. Startups are often small groups or partnerships where it’s hard to define the true leader, so it’s not unusual to see colleagues arguing over all sorts of issues, however big or small. Of course, disharmony creates additional problems and partners quickly separate. Here’s our advice: don’t start the business with people you don’t know well. Keep in mind that you will have to share everything with your colleagues – money included – and it will be difficult to stay on the same wavelength for a long time.
  1. Amateur Management
We will conclude by stating that amateur management is the sum of all startup failure reasons we mentioned above. People who are not well-organized and don’t think strategically can’t expect to run a successful company. Poor management eventually leads to all other problems, from funding to interpersonal disputes, so try to do your best management-wise to avoid jeopardizing a promising startup idea.
    • Conclusion
Running a startup is the simplest way to launch a private business, but it doesn’t make the process easy or effortless. On the contrary, it takes a lot of knowledge and hard work to craft a product that really has the potential to generate profit. In this article, we explained to you seven proven reasons why startups fail and how to avoid them. Keep our suggestions in mind and don’t repeat those mistakes – it will make your business safer and more fruitful in the long run. Good luck!
Scott Mathews is a professional content writer in such topics as business relationship, work productivity and  entrepreneurship . Scott`s the biggest passion is blogging and travelling. He regularly takes part in different career growth conferences and contributes his posts to different  websites. Contact him on Facebook and Twitter.
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