As per one of the reports of IBM institute, it was mention that 90 per cent of Indian Startups fail within the first five years due to lack of Innovation and proper Development. In that case, we can easily judge how strategy is a very crucial and vital part of any business. As we saw the number of startups is increased day by day in India. The main reason is the high capacity of venture capital of entrepreneur and low entry barrier in any business model. In that case, it’s easy for anyone to start a new business entity. In the early stage of business due to high fund capacity, an entrepreneur takes more risk without any financial planning or any marketing strategy. This was the common mistake done by most of the startups. We can also connect this thing with the stage of business expansion as both are facing the same problems in some sort. I will try to expand that stage more in my next blog.
As I am connected as a consultant with many industries, I observed many issues which lead to failures and I elaborate some of the core issues which must be considered by startup holders as preventive action.
- Lack of Market and Product analysis: – In some level, the market survey and product survey is very important. You can also be done competition analysis for better results. If you find that your product gives better value than the existing one than only it will work. In another side before entering into any market, make sure that you have enough survey and parameters to penetrate your product in the market. And most important that all the figures must be real and quantifiable not fictitious ones.
- Lack of Strategy:- You must prepare and documented plan to run any business. It’s like perform business in the paper mode so that you know the exact idea about your results. Your strategy helps to build your execution plans. It’s also advisable to check all the parameters before adopting any strategy. It should be for the long term and relate to your current situation. ( For me it’s difficult to elaborate about strategy in that short passage, I will publish a full blog in future for more clarity )
- Lack of Resource Planning:- In some of the cases improper forecast of resource also leads to failure of any startup. So the list of the resource must be prepared before startup and how it will execute in business is equally important. Under productivity and overburden of resource also gives a negative impact. So the balance between resource capacity with maximum utilization gives best results.
- Fund Blockage:- In the initial stage, we should procure and applied maximum fund to start any business. At that time financial management plays a vital role. The long fund must be performed to patch up with short term borrowings. In addition, proper analysis of Working capital must be analyzed at an initial level only. In some case, the fund will be blocked in Fixed and non-performing Assets ( like Building & Infrastructures ) and it leads to failure. The budgetary control and Project forecast will help to avoid that kind of situation.
Besides the above point, there are many more to analyze which will be focused on my next blog.
My intention is to simplify the issues in easy terms so that every business owner will understand and implement that thing to avoid failure.
” Run Business Model in Document before Execution, Because loss in a document doesn’t create actual Loss “