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6 Reasons Your Startup Is Doomed

StrategyDriven Starting Your Business Article |Startup|6 Reasons Your Startup Is DoomedEntrepreneurs are risk-takers. They calculate possibilities with high accuracy and take every step after thinking thrice. A single mistake in the initial phases can cause severe losses in the later stages.

A lot of amateur entrepreneurs make the mistake of not being thorough during the first stages. Since defining a solid business model takes up a lot of time, entrepreneurs must be patient and understanding to see through the process for fruitful business outcomes.

If you’re starting a venture or facing unfortunate results from your first venture, then we’d like to suggest some tips that’ll not only help you stand firm in the business landscape but also help to identify the places where you’re lacking.

1. Inefficient IT Professionals

IT is the core of all the success or failure businesses face. We know that initially, businesses need a lot of funding, so hiring an experienced IT professional can be expensive.

Most new ventures want great employees for minimum wage. Still, in today’s world, where living costs exceed an average man’s salary, it is almost impossible to find someone with the experience you need.

It is a primary reason startups hire inexperienced or amateurs as their employees and suffer because of it.
But, it doesn’t have to end badly for budding entrepreneurs struggling with capital. An even better idea would be to outsource IT professionals rather than hiring a dedicated team. A company like Synergy-UK is an excellent solution for all your IT-related needs.

With Synergy, you can worry less about your IT department and focus more on using your capital in other areas, ensuring company growth through mindful investment decisions.

2. Choosing The Wrong Market

You have to be wise when choosing a market for your innovations. The market is where all the targetted audiences are. It would be best not to select areas that are already over-served because then your competition would be very high, and customers will always prefer those ventures that started before you because they have gained their trust.

This would lead to a massive loss. When selecting a market, mark the severity levels (low, medium, or high) of these five warnings; the threat of suppliers, threat of buyers, threat of new entrants, bargaining power of customers, and the threat of already present competitors.

If you see threats as severe, it is recommended to choose a different market.

3. A Not So Thoughtful Business Model

It is a well-known fact that eight out of ten startups fail within the first eighteen months of their venture. There is a good reason for it. During the initial phases of the startup, entrepreneurs are optimistic about their venture turning out great with easy efforts.

They tend to disregard the prime factor leading to their downfall – the business model. A business model defines how a company will make money from its products in a type of market.

When developing your startup’s business model, you need to focus on two critical points; number one: see if there is a practical way to acquire customers, and number two: identify ways to earn revenue from your customers.

4. A Below Par Management Team

How the management team works define the success rate of your startup. Hiring an inefficient group of people only working to get paid won’t do your company any wonders since they’re not motivated enough.

Therefore, it is necessary to hire people who show interest in their field and have good communication skills since a team’s strength is defined by how well they interact and understand one another.

If the startup faces issues, the management team should resolve them instead of blaming and losing talented employees.

5. Miscalculations

Starting a business requires a lot of cash. Entrepreneurs have their ways of acquiring money. The number one method is saving up – which usually takes up a lot of time and effort.

Other ways include; asking from friends and family, external funding, or finding an angel investor. We’re trying to highlight that gathering enough money to start a venture is no child’s play.

Whatever the case may be, when you put everyone’s hard-earned resources on the line, you can’t afford problems or miscalculations.

It is always advised to let a professional financial analyst handle the finances and assets and generate a detailed report that illustrates the use of funds and highlights all the expenses made for the startup to enter the development stage.

6. Problems In Products Or Services

The product design is the key to success when starting up. This is what attracts customers and promotes better marketing. Faulty products or services will stop your brand from making progress and be a cause of ruining your venture’s reputation.

Most of the time, the products that the companies bring to the market aren’t exactly what the market needs. As stated before, you need to find the correct audience, preferably an underserved one, so you could have a high chance of succeeding.

Since startups (especially first-timers) can find it difficult to earn good marketing because of competitors, they can make themselves famous and attract more customers by introducing something that is needed rather than what is wanted.

To know the current trends, we would suggest taking surveys. Go around and ask likely customers if they would like to see your product in town; is it a must-have or just a want-to-have?

Ask them what price are they willing to pay once they see your product around. Surveys like these can give you a broader idea of what should be done to get business booming.

Final Thoughts

Only the bravest have the guts to become Entrepreneurs. Most of us tend to do things the traditional way and avoid any risks, so congratulations to you for believing in yourself and being courageous enough to make your path to success!
Now to be victorious out there, follow the tips mentioned in this article and face problems head-on. Good luck!

Launching a Business? Here Are 5 Proven Business Models for You to Consider

Do you already have a service in mind, or are you working on entrepreneurial spirit alone? Both are a great starting point from which you can build a lucrative business. But if you want to inspire investors and customers alike, you need a compelling business model that fits well with what you’re offering. Here are five potential models to choose from.

1. Offer personalization.

Tech and the internet have comfortably reassured consumers that they can easily get exactly what they need. Get your business in on the action with personalization. Customized, tailor-made, bespoke, exclusive – these are all words that can attract certain groups.

Essentially, we want options, and it’s even better when the customer feels like they invented that option. From clothing to home goods to software, allowing people to build their own product carries a lot of promise.

2. Join the sharing economy.

Is your business a viable platform that allows people to get together and exchange good and services? From Craigslist to Airbnb to Uber, it’s possible that your new venture will involve taking a step back and allowing the community at large to decide what they want, and who they want to buy it from.

Relative to other models, there’s little investment risk here. Just ensure there’s a real need for your type of platform, and that you have ironed out issues of liability beforehand.

3. Let a buyer name their price.

Before procuring funding from Unsecured Finance Australia, consider a model that makes buyers feel like they’re practically stealing from you; or at least, very satisfied with the deal they got. Known as a reverse auction, this model lets the buyer name their price or budget.

It won’t work for every business, but it could be profitable if you have a great deal of inventory you can let go for cheap, or if your business has a ton of competition.

4. Offer subscriptions.

One model that has absolutely exploded in popularity in the last several years would be subscription-based services. Here, consumers pay a reasonable weekly, monthly, or annual fee to continue doing business with you.

But it’s not all Netflix. This model translates well offline, as we see millions subscribing to receive beauty and personal care items, food, lifestyle goods, and even cars to drive for a limited period of time.

5. Integrate internet and in-store.

The major challenge many physical stores face is competing with online shopping. Fortunately, the “bricks and clicks” business model has helped keep many physical locations in operation.

When you spread your efforts between both bricks and clicks, you’re supplementing your foot traffic with online shoppers. You can allow local consumers to purchase something on your website to be picked up at your store nearby, or simply sell inventory online and ship it in addition to offering it in person.

There are many more models to choose from than the ones presented here. No matter which you choose for your business, bear in mind that your model can become as much a part of the story as the product or service itself. Therefore, you want yours to not only speak to the modern consumer, but the consumer of the future.

Corporate Cultures – Supervisor Initiated, Rules and Standards Controlled Environment

The Supervisor Initiated, Rules and Standards Controlled Environment is the centerpoint of StrategyDriven Culture-base Work Performance Model. This culture set represents a moderation of most benefits and risks. Subsequently, organizations can more easily flex in the cultural direction needed to implement a change. Conversely, these moderated cultural characteristics may lack the significant intensity necessary to rapidly drive change.


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Develop A Process For Continuing Business Model Innovation

In recent days, Apple announced that co-founder Steve Jobs would be leaving the company for a time to deal with some health issues. Investors and analysts closely eyed how the stock price responded.

In interview after interview, people wanted to know whether Apple could maintain its cutting edge innovative abilities while Jobs is out of the picture. Isn’t that interesting? Why wouldn’t Apple continue to innovate? Or will it?

Now, ask yourself how well your organization would do in making business model innovations if you weren’t available? Hopefully, it wouldn’t make any difference and your business model would be continually updated without you.

For most organizations, however, that’s not the case. The “solitary genius” toils seemingly alone (or at least doesn’t let anyone else make a decision) in many companies. When that person dies or retires, everyone knows that the glory days are over.

Whatever happened to Edwin Land’s Polaroid?

You get the idea.

Most organizations are led by mere mortals, and they look to create a systematic source of success. A few organizations are blessed with geniuses who can continue to find more successful business model innovations. That blessing, however, turns into a curse if the genius stops delivering or leaves.

While one person does all the thinking, others daydream about what they will do after work rather than coming up with their own business model innovations.

A better approach is to install a process that engages lots of people in proposing and testing potential business model innovations. Examples where continuing business model innovation had been made into day-to-day work are few and far between. Typically, however, when the leader left who had organized the innovation process, business model innovation for that organization ended.

During a time of economic crisis like 2009, most companies will stumble because they will keep doing what they’ve always done . . . even if that approach stops working. Boards of directors will be shouting for better cost controls, for stronger balance sheets, for more influential leaders. And those won’t help if the business model is broken.

Wake up! Smell the coffee.

If you don’t have a process to upgrade your business model by the end of 2009, you are in trouble.

Here are some things to keep in mind:

  1. Have lots of experiments going that don’t cost very much.
     
  2. Cut off experiments that don’t seem to be going where you want to go.
     
  3. Share insights into what kinds of improved business models might work.
     
  4. Watch progress on developing new business models very carefully.
     
  5. Invite stakeholders to participate.
     
  6. Consider running global contests to get lots of help from the world’s best thinkers.
     
  7. Let non-experts have a crack at making improvements, too.
     
  8. Focus on innovations that will expand the market by providing new reasons and opportunities to do business with you.

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About the Author

Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through and receive tips by e-mail through registering for free at http://www.fastforward400.com.

New Model Released – Business Process Relationships

StrategyDriven contributors are pleased to announce the release of our third model, Business Process Relationships. This model illustrates the many interrelations between the strategic business planning and tactical business execution processes. Additionally, the model provides a framework against which to association the many best practices posted on the StrategyDriven website.