Top 5 Solid Reasons Why Every 8 Out Of 10 Start Ups Fail

According to a research carried out by Bloomberg, 8 out of 10 start-ups fail within their first 18 months. Which means that 80% of businesses come crashing down along with all the hopes and dreams tied to them.  

A fact that makes many new business owners quite critical of their business moves.

But how can new business owners stay safe from such a huge probability of failure. Though failure adds up to your experience and at some time it leads to success, only if you able to identify what is that you are doing wrong. In case you miss out on what you are lacking, the vicious circle is supposed to continue on forever.

Therefore, it is quite important to identify the solid reasons as to why businesses fail. It often seems that businesses run out of cash and the crumbling starts happening there and then. But it is not the actual crumbling rather the cracks that appear far before the financial collapse hits.

This feature covers the most important five reasons why start-ups fail and how as fitness business owner, you can avoid falling into these pitfalls.

#1 – Lack Of Communication With Customers

Most of the times when an entrepreneur brainstorms and comes up with something new that can attract potential clients, he finds his solace by retreating.

This is the worst move an entrepreneur can make. Business becomes successful if you know what your customer wants. And you can’t acquire that knowledge without communicating with your clients. In order for you to truly cater to your customer needs, you must be willing to take 1000 steps in their direction. Not 1, 2 or 100 but 1000 steps.

The key to your business’s success lies in customers hands. Whether they are performing a certain a job, or busy aspiring some values, they are the reason for your success.

Solution

There is no better strategy than to engage in a dialogue with your customers. Don’t rely on 140 character tweets, engage into real conversations.

# 2 – Inability To Find A Unique Selling Proposition In The Market      

According to an article by Entreprenuer.com, everyone will soon become an entrepreneur. What does this really mean? Instead of competing against 500 of your rivals, you will be battling against everyone – including your own family. This predicts a lot of noise for those who are not offering any specialty. Though, the toll it will play may not be apparent at first, it will soon become your silent business killer. Desperately trying to cling on, businesses with a few customers and cash reserves continue on with the uphill struggle, as they keep questioning themselves that is this all that they have struggled so much for?

Solution

You should address the core problem i.e. figure out your unique selling proposition in the market. Businesses who take this lightly, are surrounded by circumstances that they find too difficult to handle. Jot down your business plan on a piece of paper and stick it to your wall. Give it a deep thought. Think what value you are giving to your customers in fitness industry which is unique in the marketplace.

Uncover your USP and stick to delivering the exact same. There is no way that your business might face failure.

# 3 – Inability to Convey Your USP In A Convincing Manner

Again, you might have invested your valuable time in knowing what your customer wants and then finding out a USP for your fitness center. However, you are plagued with the disease called ineffective communication and cannot simply describe what you are offering clients in return for their needs.

A big contributing factor towards start-ups failing is because many entrepreneurs spend a lot of time in figuring out what to provide their customers but are unable to convey that in a compelling and clear tone. This slowly wounds their brand, leading their business to a slow, painful death.

Solution

The solution doesn’t require much of rocket science. You need to hone on your communication skills. You need to re-consider point # 1 too. If the business owner engages in a true dialogue rather than a monologue, you would be able to communicate your point to your customers in a language they are familiar with. If your customers are Spanish, then there is no point in communicating to them in French. Be mindful of what they are saying to you and communicate back to them using the same terms. It’s important for you to keep the following three points in mind.

• Make sure what you are offering to your customers is clearly conveyed to them.
• Keep your message concise. You might be clear in what you are saying to your customers; however, you might be repeating the same thing over and over again.
• Your message needs to be compelling so that your customers are attracted in making the purchase.

# 4 – Inability To Motivate Yourself Anymore

Another major reason why fitness start-ups fail is because of leader’s lack of drive. Top management fails to motivate itself any longer, thus giving up hopes of success, seeing all their dreams and hard work crumble to the floor. Self-pity and bad decisions ultimately lead to ceasing operations of business for once and all.

Solution

Realize that your business is your baby. You build it up from scratch. And that’s what gives you total control over it.  If you lack the necessary skills to deal with people, you can always work towards acquiring them. You don’t have a good temper. Learn to control it with anger management classes. The only difference between successful businesses and failed start-ups is that the owners of former engage in personal development while the owners of latter don’t bother about changing their self. You would never come across an investor or capitalist who wouldn’t thoroughly investigate the character of the business owner before investing into it. But surprisingly many business owners aren’t ready to examine their own behaviours while they put everything at stake. They are full of fresh ideas and ready to take every risk, yet they fail. Because they lack the drive and motivation.

Avoid being one of them. 

# 5 – Inability To Decide On A Suitable Business Model To Generate Profitable Streams

This is the last major reason why start-ups fail within a short time since their inception. You fail to figure out the business model that best suits your product and is needed to generate the required profit and your business is doomed. Usually fitness owners focus on the first four reasons and overlook the fifth one. Big businesses often fail to understand which business model may suit their needs best, a recent example being Twitter.

Solution

As the saying goes, slow and steady wins the race. New businesses should work gradually towards understanding their secret recipe. Experimentation is a key here. You should be ready for new ideas and be willing to adapt to them. Think and act fast. Failing fast is better than failing slow and keep moving on until you find the perfect business model.