According to an Investopedia report published here, the failure rate of start-ups was 90% in 2019 (21.5% failures occur in the first year, 30% in the second year, 50% and then 70% in their fifth and 10th year respectively). This is an alarming number. But what causes a startup to say goodbye and what could possibly save it from closing operations forever? Here we look!
Some reasons for startup failure
- Wrong market research
Planning a product/service for customers in a way that sounds great, but in reality, would only lead to failure, is a recipe for disaster. Quite often early-stage companies cannot go further because their planning is entirely out of the market.
- Lack of enough financial support
Wrong market research, lousy planning and misdirected processes would eventually stress a startup’s revenue, finally driving it to a stage when it may find itself without enough financial support. Investors may stop responding, and the existing capital would run out, leading to a closure.
- Bad team
The greatest strength of any company is in its human resources. If team members are not motivated, if they are going against each other on pretty issues, if there is no one to put the team together, it will eventually result in the failure of a startup.
- Bad customer experience
If a startup needs to sustain itself by beating established rivals in today’s competitive market, it must develop world-class products that address customers’ evolving demands. What a customer experiences while using a product matters a lot, and failure to provide a great experience will eventually mean the company’s failure.
The need for marketing strategy consultants
These are just a few of the many reasons that could prompt a startup to exit the market, making all its ambitions futile. While what waits for a startup cannot be predicted, it can reduce many challenges by taking the proper steps at the right time.
One such step is to hire marketing strategy consultants. These consultants can help early-stage companies address the evolving market and other challenges by using their experience, expertise and domain knowledge.
Marketing strategy consultants can help startups with adequate market research, help in making the right plans. They can guide the companies to target the right audience using the right channels. Also, since they have a wide network, they may be able to help startups solve financing issues.
Hiring marketing strategy consultants is cost-effective since a startup can bring them onboard temporarily, saving costly expenses it would have to make retaining expert in-house employees. Moreover, the consultants can develop strategies and frameworks that the internal team can use to keep the business running. Simply put, by hiring expert consultants, startups can seize market opportunities, go towards the right direction and gain a long-standing presence.
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