9 Out of 10 Startups Fail: Ways to Prevent Yours From Failure

9 Out of 10 Startups Fail: Ways to Prevent Yours From Failure

You must be an enthusiastic entrepreneur with the aim of a successful startup as you are on this blog.  If yes, we are happy to deliver this worthwhile content to you. 

Many statistical reports from various firms are claiming 90% of startups fail. That means you have huge lessons to learn from such failed startups. Understanding the reasons behind the failures can lead to success. That’s why you can spend your precious time reading this blog. 

It deals with the top ten mistakes usually done by a startup that cause business failure. It also contains the best way to avoid such failure in your business. All these are delivered by our eminent business consultancy service team to aid your startup. Let’s get into the blog.

Mistake #1: Unclear Business Plan

The perfect business plan is the first primary factor of a successful business. But many entrepreneurs don’t have a proper business plan. It is nothing but a written document that explains the vision of the business, objectives, ways to obtain it, and others. 

Why Does It Happen?

When entrepreneurs kick start a business without having a proper business plan, failure happens. Besides, improper business plans also affect the success rate of a startup. Simply, a business plan which couldn’t describe the business execution and revenue generation methods, lead to a startup failure. 

How to Prevent It?

A proper business plan should comprise the executive summary, business description, market analysis, competitive analysis, marketing strategy, penetration strategy, competitive advantages, organizing and operating plan, descriptions of products and services, and portfolio. 

When these are efficient enough, the failure rate of a startup can be reduced. It also gives you the confidence and vision of your business.  

Mistake #2: Overbearing on Solitary

Sometimes, overconfidence in solitary can also cost you business failures. Even though sole proprietorship seems like pride, it contains risks. When you only manage your business, the ideology couldn’t be diversified. 

Why Does It Happen?

In a competitive market, you need to execute innovative strategies, products, and services. Following a single person’s idea may not be effective at all times for the startup. At the same time, when you are the only person taking care of all business activities, it is complicated to be active in the long term. It causes setbacks and blows in the startup after some time.

How to Prevent It?

It is good to have partners. In case you are in solo leadership, then you should hire advisors and experts for the key role in your business. You can split the work and do it more efficiently. You can also outsource any business consultancy service to take care of it. Having partners or teams allows entrepreneurs to have different thought processes to make a huge revolution in the business. 

Mistake #3: Spend All Investments Earlier

When the entrepreneurs are affluent enough, they are usually investing in the same thing to get a better return. But it may lead to business failure. 

Why Does It Happen?

One of the naive mistakes that are done by the entrepreneurs of startups is spending more money at the beginning stage of the startup. This kind of unorganized expenditure will drain the investment amount of the entrepreneur soon, and they couldn’t spend money on simple yet essential upgrades. So, the startup will fail. 

How to Prevent It?

Nurturing the startup with bootstrapping methods is one of the ways to control unwanted expenditure. This method, prefers the business to use only existing resources instead of availing external sources. For example, using a part of the own house as an office, outsourcing developers instead of hiring them, and others like the same. To get the best expenditure structure and idea, they can approach a business auditor or consultancy service. 

Mistake #4: Choosing the Wrong Resources  

Hiring resources is a crucial part of a business. And it is also one of the common difficulties of a startup that is difficult to resolve. 

Why Does It Happen?

When entrepreneurs hire the wrong resources for their startups, they may face a loss of productivity and efficiency. It means, hiring the people who couldn’t work for your startup’s growth. Sometimes, such a wrong choice can impact your other peers. So, the entire working environment will collapse and you can’t chase the vision and mission of your startup. 

How to Prevent It? 

You can prevent such business errors by choosing the right people. To do that, you should be a master of communicating with people and judging them in the right manner. Such qualities can help you to choose and hire the right people. If you couldn’t achieve such qualities due to lack of time, you can outsource an HR consultant to take care of the hiring process. 

Mistake #5: Delay in Launching Products 

However, let’s consider establishing a startup with a proper team. Now you are willing to launch your product. For instance, you wish to launch a taxi booking application for your taxi business. But when it delays launching, you couldn’t hold your potential customers for many days. 

Why Does It Happen?

In this case, choosing the wrong place for the development of the mobile application will delay the taxi booking app launch date. When you couldn’t launch it at the right time, the potential customers who are looking for your app will change over the business. 

How to Prevent It?

By choosing the right outsourcing firms with good ratings, you can prevent such errors. In this case, you need to choose the best mobile app development company for outsourcing, to be successful in this. 

Mistake #6: Disregard Reviews

After starting a business, considering reviews of the customers is crucial. If you neglect them, the success rate of the business will be minimized. 

Why Does It Happen?

Even big brands with huge customer bases could fail if they neglect customer reviews. The review from the customer is one of the important KPIs for a product or service. When you are not considering it, you couldn’t understand the pain of your customers, and also the fault in your product or service couldn’t be identified. Simply, you couldn’t understand the needs and expectations of the customers. So, the startup fails. 

How to Prevent It?

To avoid such failure, the customer who faced a bad experience with your product or services should be compromised and the fault of the service/ product must be rectified. You can run surveys to know the strengths and weaknesses of your business. Recently, many businesses develop mobile applications, to promote their business, reach more customers and get reviews from them.  Such applications can help startups by providing in-app surveys. 

Mistake #7: Inadequacy of Proper Objectives

Business objectives are as important as business goals. When a startup doesn’t focus on objectives, it couldn’t be scaled. So, identifying the growth of the business is doubtful. 

Why Does It Happen?

When the entrepreneurs don’t have any knowledge about the business objectives, this kind of failure happens. These objectives are nothing but a list of measurable results for the organization’s growth. If you don’t set the business objectives, you can’t track the performance of a business. 

How to Prevent It?

To prevent this kind of business failure, you should fix the feasible business objectives that deal with the economic, resource, organic, and social growth of your startup. It can be a sales maximization target, increase in customer engagement, and others. 

Mistake #8: Choosing Wrong Metrics  

KPIs (Key Performance Indicators) are a tool to calculate business performance. Based on this, decision-makers plan the marketing strategy, selling strategy, and other important decisions. When your startup has been dealing with the wrong KPIs, you couldn’t sustain in the market for the long term. 

Why Does It Happen?

The reason behind this error in the business is a lack of business acumen. When the entrepreneur is without any industry or market knowledge, he/she will face difficulties in fixing the KPIs. For example, having too many KPIs focusing on one thing, irrelevant KPI, or comparing your KPI with the businesses in other industries are some examples of misunderstanding of KPIs.

How to Prevent It?

To prevent this failure, you need to expose the KPIs, their calculation methods, and processing ways with the data. It takes some time to understand such concepts.  If you wish to think it’s a lie around, you can hire or outsource business analysts to do the process perfectly. 

Mistake #9: Uncertainty in Customer Segmentation

Targeting customers is one of the most important things in a business. To target the right customers, you need to segment the customers first. The mistakes in the segmentation process will cost business failures.

Why Does It Happen?

The mistakes in the customer segmentation process will lead to the wrong target audience. For example, when your segments are not relevant to the business goals, it’s meaningless. When you segment the customers based on their previous behaviors, it will lead to a big bane.

How to Prevent It?

To avoid such errors, your segmentation must be based on the present customer data and trends. Before creating customer segments, you should deal with the big data of your customers. That’s why it is preferable to get help from any data analyst. 

Mistake #10: Lack of Customer-centric 

Regardless of your business model, workflow and nature, you need to satisfy your customers. They are the primary pillars of any business. So, customer-centric is the spell you must use to attract many customers and retain them. If you don’t believe in it, holding customers will be a dream that never happens. 

Why Does It Happen?

When you are not satisfying the customer’s needs and expectations, this kind of error happens. Impolite staff, irresponsible customer care, careless customer service, and others like these are the primary reasons for the error.  

How to Prevent It?

To ensure this error, you must provide extended customer service that must be above and beyond their expectations. For example, you can provide 24/7 customer service online with the help of a mobile application. Through that, they can get direct answers to simple questions by interacting with chatbots. 

Simply, behind all these mistakes, a lack of business acumen and expertise is the reason. So, by getting help from a top-rated business consultancy firm, you can get the proper guidance for your startup. You can save your money by choosing to outsource such companies instead of hiring in-house business analysts. You need to pay only for the services you avail. 

Uplogic Technologies has been providing the best business consultancy services for years. As we have experience in app development also, you can get both technical and non-technical solutions from us. It reduces your hassle to find and manage too many outsourcing firms. 


That’s all you need to know about how to prevent startup failure. But if you wish to prevent failure, you need to take effective action now. Our experts are always ready to help your startup to get core competence and risk-free in the competitive market. 

About the author

Steven Smith

I am working as a Senior product developer at Uplogic Technologies Pvt Ltd. Uplogic Technologies is a leading producer of mobile and web app development solutions in the market. We have delivered web and mobile app solutions for numerous clients comes across the world.

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