10 signs that your startup may fail

Being an entrepreneur is not an easy task, given that 90% of startups fail. But based on the lessons of previous failures, there are some indicators that can identify if your startup may fail.

For some startups, their focus may drift to unimportant factors from the main goal. A successful startup learns to prioritize its efforts and stay religiously focused on that end goal. Keeping the team firmly focused on the end goal can also be beneficial for the work environment, as it will keep the entire team rowing in the same desired direction. If you see a startup flapping in the wind of change, going in multiple directions based on “flavor of the month,” you know the business is in trouble.

There are startups that start with innovative concepts but cannot execute them properly. This is due to a number of reasons: lack of relevant resources, lack of motivation or poor work habits, for starters. Companies that properly track their progress on a particular project will quickly see if they are falling behind and find a way to correct the problem before it becomes material. Those that are not executing well will suffer capital or deadline shortfalls. There is also a problem with the speed of execution, since many startups are not able to release products or services as quickly as their competitors. Speed ​​is essential to stay ahead of competitors and not be forced to play catch-up.

Lack of customer commitment is something that many startups face in their initial phase. There are many possible scenarios in which customers may lose interest in a product or service. Perhaps the startup did not adequately research the market to ensure significant demand? Maybe sales and marketing efforts aren't the best strategy for that business? If you don't truly understand your customers' pain points, they will never have a serious interest in your product or service. It's better to find out why customers aren't engaging, sooner rather than later, to try to solve those product or marketing-related problems to see if they're solvable, before you decide to cut your losses and go out of business.

Sometimes, perfectly capable and promising startups begin to descend towards failure due to differences between team members or a lack of effective teamwork. This does not necessarily have anything to do with the performance of a person or a group of people at work. It just means that sometimes some people can't work well together. It is the responsibility of the CEO of a startup to know what it takes to keep the team running and how to improve the team's performance so that it thinks and acts like a well-oiled machine. If ineffective teamwork goes undetected or unresolved for a long period of time, the startup will struggle to recover.

If the employee turnover rate is high and recurring, it could be an indicator of a startup that is failing. There can be a number of reasons why the turnover rate is high. On the one hand, a startup's culture plays an important role. If employees are dissatisfied with the work environment, don't like the people they work with, or lack confidence in their management, they will most likely look to leave. Therefore, if you have a revolving door with your staff, something is wrong and needs to be fixed, as you cannot scale a business on a shaky foundation of talent.

Any startup that says it is immune to market changes is dooming itself to failure. External market forces are what ultimately dictate how your startup will fare against changing trends and industry competitors. If a startup doesn't really understand or take it into account what's happening outside its own office, it's doomed to failure. For a startup to truly achieve success, it may have to pivot several times until it finds the right product-market fit. If a startup doesn't pivot fast enough, it's usually a sign that the end is near.

For a startup to remain relevant, it needs to constantly reinvent itself. Your product development efforts never end, as you should always be striving to improve from version 1, to version 2, to version 3 over time. Because if you don't, you can be sure that your competitors will clearly copy what you are doing successfully today, and they will be improving their business at your expense.

Every good startup should always be aware of its financial situation. But you'd be surprised how many entrepreneurs have no idea about their finances and therefore can't easily predict that they're about to hit a wall. There need to be financial reports, scorecards, and KPIs that a startup studies closely each week to understand how much it is spending, earning, and retaining compared to its goals. You can't manage what you're not measuring, so make sure you have your key reporting metrics identified and tracked.

Often, a startup team becomes attached to a particular perspective or approach to a problem. When things aren't going well, it's important to push the team to change their perspective and try something new and creative to solve the problem. Startups headed toward failure are often unsure of where they should be headed as a company, and they lack the creative thinking skills required to come up with potential solutions. Or they are simply inflexible and unwilling to consider a different approach.

Having the team get bored with what they are working on can undoubtedly be a startup killer. At the beginning of the startup's life, the team is motivated, as it is exciting to work at the company, and the team enjoys working for the success of the startup. Therefore, everyone works hard and puts in long hours. But the reality is that when the euphoria wears off, it's easy for the team to get bored with their work. It may be due to your attention being diverted elsewhere, a lack of motivation or the monotony of day-to-day life in the workplace, especially if the business is not being as successful as expected. A good employer will look for a way to keep their employees engaged and motivated at all times.

So do a critical evaluation of your business to make sure it's not about to go under. If any of the above sounds like your company, it's time for an immediate remedy.