Approximately 90% of startups fail, even when backed by passionate, optimistic, and confident entrepreneurs.
Prior to launching your business, you spent endless hours creating a product or perfecting a service. The importance of a hard work ethic should never be undermined, but understanding the common pitfalls of startups should not be overlooked.
In the early stages of your business, we encourage you to consider some of the reasons why startups fail and how you can be a part of the 10 percent who see their idea come to fruition.
1. No demand for the service or product If you plan to supply a service or product to the public, it is imperative to make sure there is a market demand. Without it, your business will not survive. We recommend you conduct market testing before launching a full-scale business.
2. Poor business planning Entrepreneurs without a plan often find themselves unable to succeed. Prior to launching, create a business plan that outlines your growth strategy and how you will monetize moving forward.
3. Assembling the wrong team Working with the wrong team can lead your business down a detrimental path. Instead, put together a team of experts who share your vision and who can guide you in areas you lack experience in.
4. Lack of funding Whether you are setting up a crowd funding campaign or are seeking support from venture capital firms, you will need enough money to see your business through the early stages before you become profitable. Every business has different needs, but you should consider the cost of elements such as marketing, public relations, and hiring necessary staff members.
5. Unforeseen legal battles Just as important as hiring the right marketing and sales staff, finding a dedicated legal team can make your entry into the market go smoothly. Our team of experienced lawyers at B3P Ventures offer years of experience in the world of startups.
— Scott, Friedman, Andrea Vossler, Eliza Friedman