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Reasons Why Some Start-ups Fail During the Early Years


With more and more new start-ups and business ventures hitting the markets, it is becoming more common to see them failing. Each year, start-up after start-up suffers an early demise, but why?

Starting up a business is far from being an easy feat and there are plenty of things which need to be considered before chasing the dream of running your own business. Many start-up entrepreneurs succumb to the pressures of this company and this can cause foolish mistakes to be made. Often, these mistakes can be fatal.

Although there is no one single correct approach to operating a start-up business, there are plenty of things which you can watch out for and avoid. These common start-up mistakes are made by many a start-up entrepreneur and, unfortunately, some can cause the company to fall before it has even had a chance to fly.

Here are some of the main reasons why start-ups fail during their early years –

  1. Lack of Planning

Planning for your start-up’s early days is a tedious yet necessary undertaking. Without having a comprehensive business plan in place, you may find that you are constantly fighting an uphill struggle when trying to secure investments and loans individuals and financial institutions. A business plan sets out the vision for your start-up, gives you the opportunity to learn more about your industry, see the competitors operating within your industry and, overall, puts your business down on paper.


  1. Not Appreciating the Power of Marketing

Marketing a start-up is possibly the most important thing which can be done to give it the best chance at success. Whether digital or traditional, marketing campaigns can really give a new start-up an early boost, especially if they are done properly.


When it comes to launching a marketing campaign, there is no rule book and your creativity can run wild. The best marketing campaigns use social media and levy current trends to go viral and gain exposure. For best results, draw up a marketing plan or outsource it to a professional.


  1. Being a Lone Wolf

Lots of start-up entrepreneurs are afraid of bringing other people on board and opt to instead go it alone. Although your start-up is your own creation and you want to protect it, bringing people on board to help ease the workload and diversify your infant company is important.


There is no need to, and you can’t really, be a jack of all trades when it comes to running your company. Running the company is a task in itself, and then when you throw everything else on top, it is easy to become overwhelmed and start to falter.


By hiring key staff when possible such as accountants and marketers to look after specific jobs within your start-up, you can alleviate lots of pressure and focus on your start-ups success. If you can’t afford to hire full-time staff, you can always outsource to contractors and freelancers.


  1. Spending Too Much, Too Quickly

Start-ups do not usually have cash to splash. Making huge, risky investments and spending lots of money on equipment the start-up doesn’t need is a sure-fire way to go into the red and risk losing everything. The opportunity for this spending and these investments comes with growth; ploughing all your money into your start-up on day one is always a bad idea.


There are lots of cheap and budget-friendly options available to help your start-up grow and develop during its early days.


  1. Not Knowing the Competition

This ties into your business plan. Knowing your company’s competition, who they are, how they operate and what their customers like about them is crucial to your success. Your goal as a new start-up entrepreneur is going to be to beat the competition with your superior or unique product or service, however, if you haven’t done your research, how do you know what to go for? Many start-ups fail because they get wiped out by the competition as soon as they start to grow.


Start-ups are becoming more widespread as people start to levy the internet in making their entrepreneurial dreams a reality. For every successful start-up, however, there are several ones which fail. By being diligent and applying common sense, you can avoid start-up failure.

Javi Fondevila
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