Startups are booming all over the place, across a wide variety of markets. Technological, residential, you name it. They’re continuing to pop up at a pace that they’re surpassing the number of older companies that are making the rounds. Of course, the road to success is strewn with the wreckage of more than one startup failure.
With so many that open and try to make a name for themselves, there is a handful that just as quickly fizzles out. They are unable to live up to the enormous potential they were promising when they first opened their doors.
Why would anyone pursue a startup failure?
Of course, no one sets out to fall flat on his or her face. But that leads to an interesting question — why? Why did these startups fail? What’s the big thing that held them back?
Well, it could be a variety of reasons. In the end, however, it all comes around to one point, and that’s money.
Yes, money makes the world go round. You need money to pay for bills, money to pay for food, money to pay for entertainment.
Unless you were handed a nice goose egg from a family relative or you just know some rich parents, chances are you’re just as much in the struggle as everyone else to make money. That’s why you need to know how to handle it, lest you see something that makes your startup a spectacular failure.
So the first thing you should do is not just fall in love with the idea of a startup. Saying, “Yeah, I’ll make my business do that” and then investing tons of cash into its development without a direction is unwise. It’s going to lead to a startup fail among the stuff of legend.
It’s here that you want to develop some kind of business plan.
- What will your startup do?
- How will it generate revenue?
- What can you set aside for employees and paying for your property?
There’s a lot to manage when it comes to starting a new business, and even refusing to pay attention to one key area could be the result of a startup failure. That’s why it’s important to have a plan, even if it’s just relegated to a series of cocktail napkins.
Is there really a need for your startup?
You’ll also want to make sure you have a place with your startup before you start sinking cash into it.
- Can you withstand the competition on the market?
- Do you have a product that you believe will stand out?
- Why will it stand out, and, more importantly, how will you make it stand out?
This is all part of the planning stage.
Failure to pick the right teammates?
And, for good measure, you’ll want to make sure that anyone you have with you is just as determined as you are to make it happen. Otherwise, you could find your effort doubled or even tripled, leaving you exhausted and begging for that startup fail to happen.
That’s why it’s important to also have a team behind you. The right employees are an outstanding start, especially those that want to be just as successful as you, if not more so.
However, you also want to make sure you have others in the organization that are determined to see it succeed.
That could include business partners, but avoid the shady types that look like they just want to run off to Cancun with your money. Because that will make a startup fail worse than a general lack of business every time. (Maybe check their passport just to be on the safe side…?)
Listen to your investors.
Having key investors is also a good place. However, you want to find business partners that are in it to win it as well.
Maybe someone that believes just as much in your direction so, later on, they’re not in a position where they could change it and muck everything up to the point that a startup failure is inevitable.
Make this part of the business plan as well, so you have everyone on the same page and you can keep swimming forward. The last thing you want with a startup is any kind of conflict because that’ll seep more cash than expected — perhaps even a higher amount than you first invested in the company to start with.
Once you are in business, keep that money close.
You may feel the extravagant need to celebrate and all. However, that’s something you can easily save for a later time. Do this after your company has managed to see a profit. Then you can safely spend that on a Christmas bonus or team-building exercise in Hawaii.
Summary: Patience is the key to avoiding your own startup failure.
Bottom line, you need to be patient with your money.
It’ll come back as a win in the end, instead of being that thing where you threw millions into something that went nowhere.
Remember Entertainment 720 from Parks and Recreation? Look how spectacularly that failed. That’s a good idea of how not to do a start-up.
Instead, invest wisely, plan things out, find the right people to get involved, and watch your business flourish. The last thing you need is a startup fail for you to hang your hat on for the next several decades.
