Abhishek Sengupta

Entrepreneur | Author | Podcaster

Eight Reasons Why Startups Fail ?

Eight Reasons Why Startups Fail ?

Eight Reasons Why Startups Fail ?

In recent times startup has become a buzzword. Almost everywhere, we are seeing startups. This is a good sign. However, there are a lot of news about failure of startups. This is disturbing.

Let us analyze, what are the main reasons for failure of startups. I have mentioned here eight reasons for this.

1. Demand misjudgment: It is important to judge the demand of the product, which a startup founder is creating. Creation of a product which is not in demand might be a risky proposition.

2. Not managing cash flow: A Startup founder need to manage the cash flow of the company. This is a vital step. If the cash flow becomes negative, that means more cash goes out of the company account. This need to be checked on periodic basis and must be corrected by all means.

3. Improper sales strategy: Sales is a vital process of a startup or entrepreneurship journey. There is no way left, without good sale. If the sale is not good, then process of startup gets a standstill. The sale brings revenue to the company.

4. Improper customer service: Customer service is important, as the customers pay for your products. One gets revenue from customers only. It is important to have a right policy for customers.

5. Supply chain break-down: Your suppliers are the backbone of your company. They provide materials or services to keep you running. If the supply chain breaks down, your production stops. So, this need to be checked and necessary actions to be taken to keep the company running.

6. Unethical practices: A business need to be ethical all the times. Unethical practices lead to downfall of the company. No one likes company gets into unethical practices.

7. Legal and compliance issues: You require proper advisor to deal with this, if the startup founders are not well versed with these concepts. Compliance is the responsibility of a startup companies. Right advice can help in this.

8. Problem amongst founders: This is the most painful part of the startup journey. If the founders are not sync with each other, the startup is bound to suffer.

Startup is an amazing journey. It is full of challenges. Above mentioned points can hamper the growth of the startup. So keep these points in your mind and deal with it.