Why Many Startups Collapse So Early

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Hi 🙂 Its been a long while. I have been too busy to write. Hope you find this post as useful as the others you have read 🙂

I stumbled on a course mate of mine after so many years 🙂 We got talking. I got to know he was into photography business that was not paying the bills. I know him to be creative in photography. As a result, he told me he wanted to quit and try his hands on something else. The business was seven months old. As far as he was concerned, there was no need to continue pumping money into a business that was not producing the expected income.

Well, I know there are many entrepreneurs (or intending) out there who are facing similar challenges in their businesses. So, I decided to share, through my blog, some of the things I told him, about startups and why many collapse so early.

As usual, my views come from real-life experiences of past and present businesses and they are entirely mine. Please read on….

Firstly, many startup owners hit the market with the strong urge to make profit so early. It does not work that way. Startups are new businesses entering into a market where there are competitors. Even where the product is entirely new, the fact remains that it is a new business. Being new automatically creates one big disadvantage: the business is unknown. People cannot start looking for you or your products when they do not know you exist or are not sure of you. So, many great ideas die at the beginning because of impatience. Patience is golden for startups.  Interestingly, many new entrepreneurs want to start making so much money or even make profit from the very first day of operations. It does not work that way. My advice? BE PATIENT. Concentrate on growing your business rather than making huge profits. 

As I said earlier, startups are not known because they are new. So, the question is: What have you done to create awareness about your product(s). You have to do it, otherwise you might be limited to your host community and environs and a few other people. So many startups have fizzled out of existence early because of the lack of effective marketing activities.  Marketing is as important as funds are to a business. You might have the best of products,  but revenue from sales is very low because you are not selling enough. You are not selling well because people are not buying. They are not buying because they don’t know about your business or products. My advice? Do not look at the costs involved, expose your business and products to a very wide audience. And keep doing it.

Thirdly, how good is your product – good or service? Many startups collapse early because their products are not sellable. It is either they are of poor quality, not fit for purpose, not durable or the services have been found to be grossly unsatisfactory. So, how good are your products? How good are you at what you do? Customer loyalty does not come with poor quality, non-durable goods or unsatisfactory services. No one would want to waste their hard-earned money? Would you? My advice? Launch your business and products when you are sure it will sell.

Lack of strong passion is another reason why many startups collapse early. One thing that gives one the power of perseverance is when you have a strong passion for what you are doing. This, alone enables you to endure longer than normal. It gives you hope and reasons to “fight” on. A weak passion kills dreams. It makes you give up at the slightest challenge. So, go for something you have a very strong passion for, because startups are never guaranteed a smooth sail in the business world. You need a very strong inner-drive that spurs you on in the midst of a turbulent business environment. My advice? If you know you do not have a strong passion for what you want to venture into, then thread with caution. The business world shows no mercy 🙂

Lack of proper market research is another reason why many startups collapse so early. Market research can reveal a number of very vital information like: if there is need for your product, the right price tho charge, where majority of your potential customers are located, the competing products, your suppliers, and the prospect of success, among others. Market research could cost some money and time, but can really help to prevent the early collapse of your new business.My advice? Before you launch your business carry out a thorough market research. You might have to spend money, but is cheaper than having a failed business.

In addition to all these, where the entrepreneur lacks business management skills, there is likely to be a problem with longevity. Very many great names in the business world have gone with the sands of time because of poor management skills. Having good products and huge funds are not enough to make a new business stay on. Sound management skills is need to coordinate all the available resources at the business’s disposal, to be able to survive the early days, months and years of a new business. My advice? Management skills can be upgraded through several trainings and listening to the CEOs speak about business management.

Like a baby, a new business needs to be nurtured and treated as such. Where you expect your baby to grow overnight, and start doing things as an adult, you might kill the baby very early.

I hope my article was meaningful. Please check out for more useful info @ www.infoplaze.com


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Michael M.

INFOPLAZE.COM seeks to be a provider of very useful, family-friendly and ever-green tips and info on education, business, ICT, Inspiration, family and relationship matters, living and life style and much more. If you liked what you read, please share it (them). You can get updates on this blog by filling out the subscription form at the bottom of this page, by following @Infoplaze on Twitter and by liking @Infoplaze on Facebook. Cheers.

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