Reasons New Startup Business Fail

Thorough findings and research show that every new startup business fails in the first five years of its establishment and we had to round up the Reasons New Startup Business Fail in these years. It is however clear and understandable that if certain conditions were met, a startup would have every reason to thrive well and produce a meaningful and productive end result.

If you are an entrepreneur and want to fall into the category of successful business owners, it is very vital you put in your best and perform some certain onus and responsibility which either way; hard or simple to perform. Of course, venturing into the world of entrepreneurship is a beautiful thing to watch, but, like chocolate and sugar intake, it has its other side as well and it comes in form of a project failure – no question about this!

Also, starting any kind of business; whether small, medium or large scale will always come with a certain level of risk, but you can help yourself from unnecessary heartache by putting the fundamental reasons to be discussed in place before going into the business proper.

Before moving farther, have you ever wondered why many startups collapsed with the owner; surprise, agape and lost on why their new project failed and crashed? No worries, to be explained below are common issues that tend to destruct any startup. Do master and take cognizance of them before delving into your idea, live!

Reasons New Startup Business Fail

Are you an entrepreneur? Here’s why your startup business failed.

Interest in a Wrong Business Startup Model

Having money on you to kick-start a business is one thing, picking the right and perfect business model to capitalize on is another. So, getting yourself the right business model should be one of the important elements to put into consideration before you launch a startup.

Essentially, for the future of the proposed startup and to save yourself from incurring a loss, it is encouraged you get yourself acclimatized with the design of the intended service – even right from the ground level. Hence, regardless of the model type, get yourself acquainted with the service you will be offering and how it will play out with your potential target audience.

Trying to Please Everyone

It is a rule of thumb that an entrepreneur who’s on a mission to succeed and achieve his business goal has to please his audiences. While there are exceptions to every rule, It’s perfectly natural in the course of your startup to try as possible to minimize your appeal to your widest range of customer demographic.

The truth is, you can please everyone and the more you try is the more others get hurt. Thus, trying to maximize your customer’s appeal range can muddle your startup objectives thereby leaving you with a relatively low rate of seasonal and potential customer retention. Therefore, should you detect that your startup is making waves in a certain environment, prioritize them over others when forging ahead with your startup?

Stop wasting your precious time in pleasing keep audiences in a certain demographic that refuses to bite but rather concentrate on a customer base who is passionate about your product for they will provide you with much better feedback and you will know where to improve instead of trading water where it is not needed.

Poor Customer Service

Amongst these Reasons, New Startup Business Fail, any startup which fails to acknowledge the effort of its audience by providing a good customer relationship, as well as adequate customer services, is prone to crash and fail within a few months of its establishment. As such, this should never be taken with levity hand no matter the size and scope of the projected startup.

Foster good customer service and a nice owner-client relationship with your potential customer who keeps coming and coming back again. A customer who visits you frequently deserves your attention better than that of one-time users in terms of sales revenue and marketing of your service to his family, friends, and neighbors through word-of-mouth referrals and recommendations.

On this note, if you want to establish a steady cash flow through your startup for donkey years to come, always remember who among your client base keeps your product or service lights turned on, hence, making them your top priority. Check out also our post on Understanding Customers Needs And Expectations. It will help provide better customer service.

Stagnant With New Startup Product

That you are making waves with a certain product doesn’t mean you should keep producing the same forms of products. To ensure that your startup is actively alive in the competitive market, it is expected of you to keep innovating different classes and varieties of products just to make sure your product stays active, fresh, and maintains its popularity.

Always stay tuned and pay attention to your customer’s feedback. If they suggest new features to you, take it seriously and try looking for ways or methods to improve your goods, product, and/or service.

Running Out of Funds

So the last on the list of reasons why some startup businesses do fail in a few months of their establishment is lack of adequate funds and resources at hand. As such, it’s not a good thing to start a business when the capital investment isn’t enough such is cancer to the growth of any business.

In fact, there’s an obvious thrill in starting a business from scratch or raising a project for the ground to offshore with lots of hard work, persistence, and enough budget. This will enable the startup to push through any obstacle or limitation that comes before it. But refers will have been the case if there are not enough funds. Read also, Beyond Bank Loan: 6 Source Of Fund For Your Business to help you stay afloat.


At this juncture, it is very ideal you know that some startups do fail also if the business owner is not ready to take risks or build what people need and wants. So, therefore, couple this with the above-mentioned and enumerated points, and the sky shall be the beginning of your new startup.


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