Why do Most Businesses Fail Within Their First Three Years?

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WELCOME TO
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Why do Most Businesses Fail Within Their First
Three Years?
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As many new businesses are springing up like
mushrooms all over Australia and the world, it
may look like a childs play to start a
business. You are reading this article, which
means you want to take an action to grow your
startup. You might be a motivated entrepreneur,
startup business, or someone with great
innovative plans. If so, congratulations for
staying true to your dreams. In the
entrepreneurial era, where changes are happening
at a rapid pace, it is no longer enough for
businesses to remain positive after setbacks and
face risks. In order to grow and even survive, it
is required to be capable enough to adapt the
quickly changing pace of the global world. But
did you know that 30 percent of new businesses
fail in the first year of their startup, and
around 60 percent of them collapse within the
first three years. Why? Because they fail to turn
their business into The Big company. One wrong
decision and it may cause a startup to fail. But
what is the reason? What is the thing that makes
those 10 percent stay in the run even after three
years of their start? From the lack of knowledge
about industrys functionality to a wrong
selection of the team, here are the top 7
reasons that make startups fail.
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1. Desire to do everything yourself
Yes, the idea of a solo entrepreneur sounds
great, but the obstacles dont always make your
idea worth it. It is not just an individual that
makes a business grow, but it is the
collaboration and teamwork that makes this
happen.
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Where do businesses go wrong?
Startups are challenging, and doing it all by
yourself can obviously be devastating in the
competitive era. Moving alone makes it a
complicated path. It requires dedication, smart
work, and obviously the helping hands who will
help you grow. Be it a management team or someone
to market your new business startups need
different minds that work all together to grow a
business. Just think of how many ideas a team
could get to improve the workstyle and present
your business to the target audience!
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2. Setting a complicated business plan

• Young entrepreneurs often confuse the business
  plan with unrealistic assumptions, sloppy
  presentation, and vague plans. They dont have
  specific goals and create complications. Poor
  benchmarks and wrong strategy make the business
  destroy in their starting years.

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Why does business fail?
For any business, a model plan is the backbone.
It is a fundamental building block that needs
attention. Do you know the audience you are
going to target? How are to going to sell your
services? Is there a plan to increase your
sales? With a complicated business plan, you
focus on unnecessary details that entangle downs
the model.
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3. Using the investment too soon
Investing a lot of dollars in a business that
you have just started may even crush a company.
Fortunately, you can look for chances where you
can make money for your startup, and if you have
money by yourself, then it is great.
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Where does the investment go wrong?
One of the most naïve misconceptions that new
businesses do is to use their first investment
completely. Wise are those who strategize where
to invest their money and how much. New
businesses should not invest everything in
products rather it is better to divide in the
different things such as good team, company
branding, and of course promoting the products in
an effective way.
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4. Poor communication
Besides knowing the potential customers, it is
also required to seek attention to succeed and
make them become your real customers. In many
cases, customers try to contact the business,
but, being a startup, businesses dont have a
plan to answer each and every query coming to
them. Here, emails and social channels are a
great way to reach out to people who wants to
know about your business and need them.
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What goes wrong?
The lack of a good marketing and communication
strategy can lead to the collapse of a company.
The research figures show that poor
communication played a role in 14 percent of
failing startups. Here, the communication
doesnt have to be one-to- one, but an automated
way to translate your message to the customers.
Are you using social media? Then why not connect
to your customers through that and help them know
your business well. This is where most of the
businesses lack and fail to reach out to the
people who need them.
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5. Creating an unattractive product
Not knowing the demand of customers creates a
risk factor for the startups. In 17 percent of
failing startups, the business failure has to do
with products that are not very attractive to
the user or even unusable products.
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Why does the business fail?
Often this is because the team working on the
development of the product is so focused on
their own idea that they completely ignore the
outside world. Have you thought of asking people
what they are interested in? Here, feedback
forms and social media reviews are great tools
that helps businesses reach the audience and
know their interests to overcome their loopholes.
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6. Ignoring user feedback after launch
It is 100 certain that your startup will fail
if you condone user feedback and do nothing
about it. The feedback is a gold mine for an
emerging company. Dig in more, go to the roots,
and make the product better with feedbacks!
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Where does it go wrong?
This is the most simple and obvious reason for
business failure. Once you have launched the
first version of your product, you should always
take user feedback seriously. Have the courage
to accept negative feedback. Not paying
attention to user feedback is your startups
guaranteed killer.
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7. Hiring the Wrong Team
Employees are an asset, especially for a company
that has yet to establish its name in the
industry. Your organizations goals, project
success rate, and service quality depend on the
efforts of the employees. One of the biggest
startup mistakes they try to choose cheap
employees over the experienced. This leads a
growing company to flop in the start as they
dont have skilled people who can help them grow.
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Where does it go wrong?
Thinking only about money in start is a common
mistake. Of course, the ultimate goal of all
businesses is to monetize their services and
increase their ROI. But can you name even one
company in the world that generates high revenue
without providing the customers with anything
useful? Exactly, thats impossible! Have you
hired someone to spread the popularity of your
business? If not, hire the skilled ones who can
generate you ROI.
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Conclusion
Your ambition is to find a gap in the market that
no other company has yet discovered otherwise,
you wont be interested in reading this article
up to here. Many startups will arise, and many
will disappear. The one that stays in business is
a company that avoids all of the above mistakes
and chooses customers over premature scaling. As
a growing startup, you should focus on teamwork
and have a great marketing strategy. Do you know
why we are talking about marketing your business
in the starting years? This is because marketing
is the backbone of any small to large business.
But how? We have given the answer to this
question in our next blog keep reading!
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