Top 3 reasons why a Start-up fails.

Within the span of last 7 years Start-Up has been one the most engaging trend, as it has attracted substantially more youth than it did ever before. This is a good sign of progress among youth, as they are now willing to make it on their own rather than following through traditional ways. Today’s youth is not afraid of going against the grain, although this is the sign of confidence but it has mostly been the reason for failures of start-ups. Fear of taking risk is what gives you the push to make it through.

Today the definition of start-up is mostly perceived as building a business on just an idea by acquiring funding from investors. And so, everyone thinks that’s easy, all I have to have is an idea that and build a business plan around it to pitch it to investors. Above 90% of people who engage in start-ups build their business plan in relevance with investor which is the first big mistake. A business isn’t built to raise funding it’s built to raise revenue, and so a business plan should be curated for investors but for the clients / customers.

The new entrepreneurial generation misconstrues start-up as a business, but in reality start-up is a stage of business. There was a time when 90% of business that started, survived and flourished; by now this figure is upside down. The reason the start-ups where so successful back then was very simple and logical. Back then entrepreneurs cared more about nurturing their business with efforts rather than spoon feeding them money to grow. Yeah sure! Money multiplies money, but the fact isn’t universally applicable cause if it were so then no small business had ever became big. An entrepreneur must never shelter the ideology that justifies the fact that every start-up can only be a big business by investment.  And so, he/she must never stop putting in efforts into that start-up just because it didn’t received any funding. A start-up could only be a business if it has the juice to survive even without the funding all it needs is an effort.

There are various key factors that an entrepreneurs must be aware of, these are:

Exit Strategy: Remember it’s pessimists who created parachutes. It’s always better to assume that at one point plan may fail and exit strategy is what help you to limit your exposure to loss. Learn your weakness so as to provide more strength to them, to keep business from failing.

Market Analysis: You must never think of your idea to be a unique until you happen to have invented a revolutionary product that provide better solutions. And when your idea isn’t unique, you then have to analyse the market to realize what would be sector of your potential clients / customers.

Resource Allocation: Although investment plays an important role in growth of business but it doesn’t mean that pouring in more will result in exponential revenue generation. Understand the market place and smartly allocate your resources accordingly.