6 reasons why start-up businesses fail quickly

Statistics are quite cruel to startups - data showFrom an idea to a unicorn - startups in Russia and the world in 22 figures / RBCthat 90% of new companies fail. And 10% are closed in the first year of operation. All because of a few mistakes that inexperienced entrepreneurs make.

1. Lack of market research

Imagine that you have always wanted to open a real estate agency and you finally have the opportunity to do so. However, the desire to fulfill a dream can close your eyes to economic instability in this area, an excess of similar firms in the market, and other important factors. As a result, from the very beginning the company will be doomed to failure.

The best strategy is to find an empty niche in your area of ​​interest and fill it. It is much easier to satisfy the unmet needs of customers, and not to convince them that out of the many companies it is worth choosing yours.

2. Problem business plan

A clear and realistic business plan is the foundation

successful company. It should record achievable goals and the way to them, as well as possible problems and ways to solve them. When preparing the plan, you will need to conduct research and surveys to study how much the company's services are needed by potential customers. And also calculate the budget, develop a strategy and determine the timing of its implementation.

After carefully drawing up a plan, it remains to follow it step by step. If you start to doubt whether the costs are calculated correctly, or change the strategy on the fly, the probability of failure becomes much higher.

You can deviate from the plan only when it becomes obvious that it is completely unsuitable. In this case, first of all, you need to figure out what is wrong, correct the shortcomings and follow the new plan. The more mistakes made at the planning stage, the more money it will take to launch. Unfortunately, this also reduces the chances of success.

3. Insufficient funding

Starting a company with little cash and then borrowing money to keep it afloat is not the best strategy. If you are realistic about financial issues from the very beginning, you can calculate how much you will need to support the business. At least for a while, until he gets on his feet and starts to make a profit.

Attempts to save money at launch are unlikely to work - most likely, the company will not be promoted to a decent level, and the money borrowed or the loan will still have to be repaid.

4. Unsuccessful promotion

In the modern world, the presence of a business on the Internet, including social networks, is no less important than the physical location. The successful location of the company on the map and competent online positioning with a corporate website and pages on social networks will help to make yourself known and attract the attention of customers.

It's like advertising and marketing. You need to make sure that they don't just reach people, but reach the right people. Huge billboards in the city center are unlikely to be of much use to an Internet marketing agency, and online advertising not suitable for a business related to industrial construction. Product promotion should take place where the potential clientele "dwells".

5. Unwillingness to change

After the plan has been prepared, the business has got on its feet and the client base has been developed, you should not relax and calm down. Demand for a company's services or products can easily decline.

It is worth continuing to study the market and be ready to make changes to the business plan. If you keep your finger on the pulse of new trends, this will help to maintain and develop success. Look at the music industry or the film business - their path proves that even the most successful fields seriously change over time.

6. Expansion too fast

When the business becomes stable and successful, it's time to expand. The right approach is important here - to treat it as if everything starts from scratch.

If the goal is to increase influence, you need to achieve the most complete understanding of how the areas and markets work in which the company is going to try its hand. If you plan to display additional services or products, you should study the needs of potential customers.

When a company grows too fast and doesn't go through all the stages of planning and executing a strategy, expansion losses can drag down the entire business.

Despite the disappointing statistics, do not be afraid to open your own business. Responsible approach, market research, good planning and flexibility will help to avoid catastrophic mistakes at the initial stage.