5 Top Reasons Why Startups Fail In Their First Year

Category: Startups

The startup business model is exposed to numerous market challenges. Are you ready to take those challenges? If yes, then you have opened the doors open for your new venture. But do you have the courage to face failure? If you have these two things in you, then you are fit to become a startup entrepreneur. 

Patience and endurance are essential to building a strong startup business. You need to understand some core issues that make startups fail in the long run. Do not be afraid to make mistakes but try to learn from your mistakes to ensure profitability for your business. There are several reasons why people fail in the first year of their startup business.   

Five crucial reasons why startups fail in their first year 

There are several reasons why startups fail in their first year. Therefore, let’s explore the reasons and help future startup entrepreneurs prevent the same from happening. .    

1.No market demand for your product- 

In the early stages of business startups, one fails to understand what customers want from them. You may be an innovator of new products and services, but your innovation has no value if it lacks awareness.    

For spreading awareness for your product and service, you need to have a healthy marketing plan. Sometimes, due to lack of a proper marketing plan, businesses often suffer from a high degree of rejection. Hence, startups quit at an early stage of their operation. Therefore, you need to strategize and re-strategize your marketing plan to increase the demand for your product in the market.   

2.Lack of skills in the founders of the business- 

Many business owners cannot take the corrective actions that are required for the business to grow. It would be best if you focused your attention on such industries that can give value to your education and skills. Your skillset must match with your team; otherwise, it can be an odd combination and may result in business failure.     

Your company must consist of someone good at sales, someone who is good at bookkeeping and accounting. Along with that, your team must be a group of motivated individuals who can tackle any situation very quickly. Better to say that they must have the ability to work under pressure and must enjoy their work rather than consider it as a burden.   

3. Ignoring the cash burn- 

Most entrepreneurs are either engineers or technicians at heart. They want to produce the best product that will solve all the problems of their customers at one go. But while performing this task, they often forget to control their investments. Hence, it results in more cash outflow rather than the inflow.   

In such a scenario, it becomes difficult for the entrepreneurs to make the branding process smooth due to lack of funds. Sometimes, delay or non-payment from the customer’s end increases the difficulties even to meet the break-even point of the business. Therefore, the entrepreneurs either wind up their business or exit from the market.    

4. Reluctance to collect feedback from the customers- 

Sometimes, startup business owners show their reluctance to collect feedback from their customers. Feedback from the customers can help them to improve their products and services. In some cases, feedback from the employees can also work positively. Hence, being a leader of your enterprise, you need to keep your mind open to get the best suggestions on your product and service development from anywhere.    

5. Weak team and poor leadership- 

Quality team building is one of the crucial aspects that an entrepreneur must focus on. They must hire those employees who will be dedicated to working with their full effort. Job hoppers and close-minded people can destroy your team spirit. Hence an employer must focus on this fact very much before hiring anyone in his team.   


Hence, if you can avoid the mentioned errors in your startup business, then you can become successful in it. You can also do business or trading in bitcoins for making money available in meeting your daily working capital needs. You can visit the bitcoin evolutionto get a better insight into it.Hence, if you want to become successful in your start up business then you must follow the above points. 

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