why do most startups failA recent study tried to determine the factors that go into a start-up company’s success and failure. Their findings identified one main reason why do most startups fail, trying to grow the business too fast. In other words, growing up too soon. Now, if it were really that simple there wouldn’t be anymore failing start-ups. So, let’s take a look at some of the reasons behind the reason.

Why So Many Startups Fail

One main cause of why do startups fail is wasting too much money on marketing, without taking the time to find out if your target customers really want what you’re selling. Also trying to modify your product to suit a certain clientele. Adding features that are “nice to have,” but not essential to your product or service, without taking the time to really understand your customers and find out if they actually need these features.

Another main reason why startups fail is pre-buying. That’s when you decide to pay for 5 tons of cotton cloth because you’re sure you will be selling 100,00 diapers in the near future. Or you buy a 50,000 square foot building, so you won’t have to go looking for it a year from now. Even though what you need right now is 15,000 square feet.

Many new owners get stuck in tunnel vision, focusing solely on growing your business and not noticing other opportunities that could prove more profitable in the long run. It’s easy the think about expansion when you are selling all of a product as fast as you can make them. Then wind up hiring too many employees. Don’t get in a hurry to sell all those diapers when you could open up a whole new line of fancy diaper pins, too!

Take time to think it out, and don’t underestimate how long it can take to produce your product, get it into the hands of your customers, and then confirm whether they really like it or not.  Time is something that few start-ups feel they have enough of. But taking a little more time to get it right before you begin to think of expansion can make the difference between success and failure.

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