ABC’s Shark Tank has inspired an entire new generation of entrepreneurs to get out in the world and follow their dreams and launch a successful startup of their own. But just like in the tank, not every startup will experience success. In fact, the reality is that about nine out of ten startups will fail, and 50% of new businesses don’t make it past the four-year mark. Why do so many startups suffer this fate? Here are some of the most common reasons:
Bad Financial Planning
Money is tight in the early stages of a business, so if you don’t watch your spending, it could be the end for your startup. For example, don’t hire more people until you absolutely need to, instead, take on more roles yourself.
Yes, this means you will be working more hours, but that’s the life of an entrepreneur. If you have to go on business trips, don’t fly first class until you can afford it. In the beginning, you have to be mindful of how you spend every penny, otherwise it could mean the end for your startup.
Lack of Passion
Being an entrepreneur is a 24/7 job, so you have to be passionate about what you do in order to succeed. If you don’t believe in your product, you won’t be able to get others to believe in it either, so you should never get involved with a company unless you want to live and breathe it. If you don’t have this mindset, you won’t be able to turn your startup into a well-established, successful company or launch a successful startup in the first place.
Unable to Secure Investors
Most startups rely on the help of investors in order to make it through the first few months or years, but when they can’t nail down an investor, the business collapses.
If you’re having trouble finding an investor, tap into your network on social media or search for pitching competitions or funding opportunities in your community. Before you go in front of investors, role play with a friend so you can practice your negotiation skills. Remember, you usually only get one shot at this, so make it count.
Problems With the Market
Some companies release products or services without doing research to see if there is a high demand for them in the market. Even if the product is innovative, affordable, and well-made, if there’s not enough demand for it, it won’t succeed on the market. To avoid running into this problem, startups must do market research prior to launching their products or services.
How to Launch a Successful Startup According to the Shark Tank Experts
Now that you know why so many startups fail, take a look at this infographic to learn more about achieving success with startup tips from Shark Tank: