Startup fails? Tips to improve your odds

The startup world is extremely risky; as the saying goes, "nine out of ten startups fail." That's a staggering failure to success ratio. So much so that when we talk about startups, we almost always talk about failure. Many aspiring entrepreneurs are discouraged by their fear of failure. The game of startups is all about risk management.

As you grow, you might be excited to begin scaling your startup. But there are challenges in the road ahead that could lead to certain failure. Make sure you avoid these mistakes most startups make when they grow rapidly.

Analysing the market fit

Several entrepreneurs fail to recognise that when it comes to putting their business idea into action, they should prioritise meeting market needs. However, it is important to remember that the solution to those problems does not always have to be conventional. What we need to understand is that failure isn't necessarily due to the market's lack of interest in our product or service, but rather to our inability to keep up with current business trends and behaviours in a reasonable amount of time. As a result, conducting a thorough market study, as well as working collaboratively with potential customers for the test and trial, interviewing and surveying the target market to understand market need and market fit, becomes necessary.

Having a defined business plan

All new businesses require a well-thought-out business plan with realistic and educated projections for the future. Structure will be critical in the early stages, but many start-up businesses fail because they set their vision too high or diversify too soon. It is critical that you stick to the business plan you created in order to establish goals and objectives and to know where to direct your business. In other words, this helps you and your team understand what you and your team need to do to take the company to the next level.

Hiring a good team

A great team with diverse skill sets is essential for a startup's success. Recruiting a quality team of people to work alongside you is critical to the success of your new business, and it takes careful consideration to ensure that each employee brings a new skill to the table. The same is true for your business partner; they should be as enthusiastic as you are and possess skills and knowledge that complement yours.

Promote your business

As a startup, you must use all marketing channels to propel your company forward; using one channel in isolation is unlikely to yield the desired results. Marketing, branding, raising awareness, and so on all take a significant amount of time. If you want your venture to succeed, you must understand how to attract the attention of your target market and convert them into leads and customers.

Managing finances

Financial management is critical for all types of start-up businesses. This is one of the reasons why even large corporations fail. When your cash reserves are depleted, you will be unable to sustain your business without raising additional funds. Both long-term and short-term cash requirements should be carefully planned. Businesses that do not seek professional advice risk having their financial problems worsen.

Identify areas of opportunity

Identifying areas of opportunity is the only way for a business to improve and increase its chances of continuing to operate and attract customers. You must identify the aspects of the business that need to be improved, such as manufacturing, administrative, or maintenance processes, and consider how to improve them.

(The author is the Co-Founder and Directors of Fat Tiger)