Authored by Sidhartha Mukherjee
The pandemic has affected economy drastically with millions of people losing their jobs but it has brought an opportunity for those who always wanted to do something of their own. Lots of budding entrepreneurs have started their own ventures with much passion and enthusiasm but still they failed to keep the initial hype and fail. Read this article to find out the reason for their failure and tips of success for start-ups.
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Start-up is an adventure
The arena of startups can be exhilarating, adventurous and extremely fulfilling. The rush of adrenalin from successful operation of a startup is unique and often a life changing experience.
With shifting economies the world over, traditional employment opportunities receding and avenues opening up for doing one’s own thing; startups are reality in now-a-days.
PM mission of Atma Nirbhar
The world is seeing an unprecedented acceptability and success of the first generation entrepreneurs. The recent pandemic seems to have tilted the balance in favour of innovative and robust Startups. In India, the movement has received a great fillip due to the Hon’ble Prime Minister’s various initiatives including Make in India, Atma Nirbhar Bharat etc.
Much appreciation is due to all the brave and enterprising souls who embark upon a journey of startups, no words of praise are enough for their gallant efforts. However, all the world loves a winner and seems to have no time for the looser. Its true for economics and market as well.
Reasons for startups failure
If one was to examine the ecosystem of Startups we shall find there are a good number of losers. A report seems to suggest that in USA:
90% of new startups fail.
75% of venture-backed startups fail.
Under 50% of businesses make it to their fifth year.
33% of startups make it to the 10-year mark.
Only 40% of startups actually turn a profit.
82% of businesses that fail do so because of cash flow problems.
The highest failure rate occurs in the information industry (63%).
Tips to avoid failure for start-ups
That makes Startups a pretty hazardous operation. For those who have iron in their souls and still want to go ahead, fortunately there are ways of making ventures demolition proof. Like any other business enterprise, startups apart from the basic requirement of focusing on the Vision, Mission, Value aspects need to honestly and critically examine their unique offerings to the society at large which can grant ready acceptance. Experience, careful planning, market research, capital acquisition, staffing, resilience etc come in very handy. Here are some aspects which Startups should consider to ensure success:
Ensure there is need in the market for the offered product or service
Acquire Competence for successfully running the venture
Gain experience from secondary sources
A through SWOT Analysis of the Startup
Right pricing formula
Flawless Cash Flow modelling
Good inventory management
Application of Appropriate Technology
Have a well thought out HRM Model for right Talent Pool
Build a moat around the Start Up to avoid pilferages especially of ideas and intellectual property
Build a system for administration, MIS & knowledge management
Scaling up and looking beyond startup threshold
Seek out governmental subsidies
Ensure a good compliance system for laws and government regulations
Have patience, persist in face of resistance. Have a business continuity model at hand
Be prepared for crisis
Leverage the communication pipeline; Conventional as well as Social
Avail services of a good mentor/consultant
Take care of yourself. Stay Safe, Healthy, Positive & Resilient
Develop a controlled emotional involvement approach. Separate Professional from the Personal front
Of course, remember the journey is as important as the destination.
If some of these vital aspects are taken care of, there is no reason why a Startup will not succeed, that too in India. After all, Latin America and India are among the most entrepreneurial regions globally.
The writer is a former executive director (HR) Indian Oil and based in Delhi. He can be reached at firstname.lastname@example.org
Views expressed in this article by the author are personal.
Keywords: Startups, Indian Oil, Failure, Chalgenius, Atmanirbhar, Atmanirbhar bharat, Delhi
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