The majority of founders and entrepreneurs are already dismally aware of the shocking, and rather depressing statistic that 90% of all startups fail. We do however, ALL assume that with the right steps in place, we are not to become just another statistic. In fact, we’re all CERTAIN there’s a market for our product/ service, have an idea how to fund it and how to source a robust and highly productive team. So why on earth do so many founders fail?
Let’s have a look at the top 3 reasons why startups fail
Using Your Personal Savings To Fund It – A recent study has shown that the large majority of startups and small businesses are funded by the founders own savings! 79% in fact! This may seem like the ideal option over borrowing from the bank or seeking investors, but once funds are being drained from your account BEFORE you get to see a return, it can create a HUGE amount of stress on you psychologically, physically and at the worst, even effect your family relationships.
A Weak Team – When hiring a team, it’s vital you can see growth in each individual, the strive they have for career progression WITHIN your business and not just using it for a stepping stone. A startup will come across all sorts of mountains in the road within the first 3 years, some ideas and concepts will have to change COMPLETELY and the team may be put under an enormous amount of pressure, asked to work long hours or to complete tasks that were not in their job description. Key skills to look out for in a fantastic team member are;
- Passion in your product and belief it has a market
- Awareness of overtime needed
- Eager to be part of a new product and to see it through to the end
- Entrepreneurial qualities
- The ability to think outside the box
- To accept change and push on with the job at hand
Be realistic and do NOT create empty promises that are completely unrealistic. Pay rises, incredible bonuses and a jet set lifestyle are a dream, not currently a fact. This realism saves any staff fallout in the long term.
Incompatible Partnerships – Many of today’s iconic companies were started in pairs, but 65% of startups fail as a results of conflict among co-founders. It’s all very well finding a partner that believes in your product, can envision it’s future success and matches your creativity, but 2 creatives together may not have the grounding approach needed in the startups early years. Try to find someone you;
- Genuinely like and want to spend time with
- Someone that has complimentary traits
- That strives for growth and is willing to work the long hours
- Who shares your vision
- Expressive with great communication skills
Designated PA are an award winning startup and have managed to grow a large and successful team with incredible results, all within 8 months! Get in touch today for all your staffing needs, digital marketing and branding, or just to have some help with the accounting to keep your startup in check!