THE STARTUP BUSINESS: IS IT WORTH THE RISK?

Considering all the factors of paramount importance required to commence a new business, Asia has always been one of the most favourite destinations for the same. On an average four start-up deals were announced every weekday throughout 2016 in India itself. If you think about it, starting up is slowly becoming the faith of many in India. But start-ups are not only about that one “light of thought,” the idea or the notion on which a person wishes to display his/her virtuosity, it’s a lot more than that. The biggest skill of a start-up lies in being agile and possessing the insight of balance. The “first year” of any start-up is the riskiest period and having passed through it makes the road ahead much easier.   But let me be blunt from the start; most start-ups fail. Now, let us try to comprehend the reasons for these failures or the things that must be strictly avoided while initiating any business plan. Here, are 5 big causes.

1. Lack of Awareness: When you have an idea or you start a business but do not bother to study the market, find out the needs of the prospective customers, analyse the balance of demand and supply. Being unaware about the market conditions, the phase economy is going through and changes taking place in the environment could be very difficult for your business to sustain.

2. Scarcity of Resources: Resources especially monetary resources are the lifeblood of any business. It is essential to get regular funds for the successful functioning of the business. If the business is unable to generate resources then it is in ill health. As it is rightly said, “Lack of money is the root of all evil”. Disharmony with the investors or the co-founders of the business often closes the door to a lot of opportunities of flourishing your business.

3. Poor Marketing: Designing the product and implementing the business plan does not end your task of commencing business. Proper marketing techniques are required to hold a prominent position in the market and add value to your product. No matter how stunning and impeccable your product is, without proper marketing and adverstiment it may not reach the desired or the target market. Hence, would make your product worthless. Marketing is an essential factor precisely in the initial phase of your business.

4. Incompetent Management Team: A diverse team with varied expertise and faculty to handle different situations is reflected by the success of a business. Poor team management may lead to deviations or even loss of trajectories. A good team may also rule out most of the above-mentioned causes of failure of any start-up. Therefore, to keep the spirit of a business alive you need to maintain a perfect set of employees working at your disposal. As it is well said, “There is no dance without the dancers.”

5. Failure of Business Plan: This would be the last reason a businessman would wish (if at all) his business to fail upon. But, this is also one of the most common causes of failure. In the start-up world, the entrepreneurs are too optimistic about the ease of acquiring things like resources and customers. This could be quick and easy in the beginning but gradually turns out to be quite expensive task for them. Because almost all the businesses have a series of management functions it is crucial for them to analyse each function carefully right from product development to marketing of the product. For businesses having one time investment this may not be tough but for businesses with recurring investment requirements it plays an important role.