Reasons Why Startups Fail and 7 Ways to Overcome These Challenges


Most entrepreneurs believe they will bring the next biggest revolution in the niche when launching their startup. However, the harsh truth is, unfortunately, around 90% of startups fail. As a startup owner, these stats might seem a bit intimidating and concerning to you.

Starting up a new venture is no piece of cake. It requires plenty of effort and time from your end to make it successful. Moreover, an essential quality of entrepreneurs is they learn from others’ mistakes. So before you invest your time, money, and hard work in your startup, it would be best to familiarize yourself with common startup mistakes and learn how you can avoid them:


Most startups believe having a unique business idea is enough. They don’t have a strategic plan in place for building a product or service. They have no idea how they would manage the marketing and finance aspects of the business, leading to failure. When you don’t know what you need to do next, it is easy to get distracted.

And while making a business plan seems like a daunting task, you can’t just overlook it. Instead, it will serve as a roadmap for your business. Therefore, make sure to create short-term and long-term goals. Only then can your business drive sales and earn profits. Are you unsure which strategies and tips to include in your business plan to help you grow? No worries, DigitalSupermarket has got you covered.


It is no secret that your employees can make or break all your business efforts. So look at your team members. Are they professional, well-qualified, and well-skilled? Not hiring people who align with your company goals and values can be detrimental to your startup.

Therefore, hiring people who fit the job’s role is essential. Build your workforce with people having potential and passion. Also, make sure to hire people that are culturally fit. The more robust your team is, the greater chances your business to grow and succeed.


Answer this! Can you tell others about your startup with excitement and passion? Put it this way; passion is a necessary ingredient in your entrepreneurial journey. Conversely, if you are experiencing boredom in the early stages of your entrepreneurial journey, there is a high possibility that you will fail down the road.

Often, entrepreneurs start their venture because they have the itching to solve a particular problem. So if you are not feeling passionate, chances are you lack knowledge in your specific domain. Reading books and articles is an excellent way to increase your understanding of your industry.


The most significant reason startups fail is because the startup owner fails to conduct thorough market research. Sometimes, you believe your business idea is unique, and your invention will skyrocket the market. However, later on, you realize there is little to no market. That means there aren’t many customers who would purchase your product or service.

Therefore, you can avoid this problem by conducting thorough market research, both primary and secondary. In addition, it would be much easier to make changes in your business model once you know your market.


No matter how good your business idea is or how excellent your products or services are, your business would fail if you lack financial management skills. So if you wish to earn more, you need to keep an eye on your expenses. Are they exceeding your allocated budget? If the answer is affirmative, there is a high possibility the financial management for your business is poor.

You can solve this issue by keeping track of your money. Know where your cash is coming from or going. Creating accounts can help you stay on top of your finances.


Another common reason why startups fail is that owners often neglect their customers. Customers are the crux of your company. How can you attract your customers to your brand if you don’t know their needs, demands, and preferences? If you wish to make your startup a success, make sure to keep your customers a priority.

You can tackle this problem by getting feedback from your customers. Listen attentively to what they have to say. Don’t feel discouraged if you are receiving negative feedback. Instead, take this as a challenge and improve your strategies to keep your customers happy and satisfied.


How would your relevant target audience know about your product or service if you aren’t investing your time, money, and energy promoting your brand? Your fantastic product will fail if you are not promoting it adequately. One way to help your business grow and make it successful is by gaining insights into your target customer base and getting their attention enough to convert them into leads.

Thus, make sure to avoid this problem by adopting different marketing strategies. For example, you can send emails, post about your product/service on social media platforms, use paid advertising, etc. Moreover, are you planning to market your product/service after its launch? That might not be a good idea. The competition is fierce in the business world. Therefore, you should start marketing even before launch to keep your customers hooked to your brand.


Let’s face it; failures in business are nothing new. And young business owners can’t get scared of statistics and leave everything on bad luck. So the best thing any startup owner can do is learn the common reasons for failure and always be ready to tackle the challenges. After all, the happiness and satisfaction you get with running your business successfully will outweigh all your struggles and challenges. Moreover, it is to note there is no exact number of reasons as to why startups fail. Other startup failure causes may include strong competition, mistimed product launch, pricing issues, legal challenges, etc.