Home Business Why Some Startups Fail and Others Succeed (and What To Do About It Today)

Why Some Startups Fail and Others Succeed (and What To Do About It Today)

by Edvard Berlusconi

We see it every day – a number of start-ups popping up from all over the world, and dying almost as fast. Only a few companies manage to make it out of the struggling period and make a name for themselves in the market. What is it that separates these from the failed start-ups, and where can other companies improve to become equally successful? Keep reading to find out.

1. Low starting capital


Low capital at the initial stages of the business is a clear red flag. If you don’t have the money to pay bills, rent, and salaries, then you won’t have the trust or support of the people that work for you. Having a person responsible for CFO Services and to make sure that the company will be able to run with the initial investment is crucial in the success of the company.

2. Premature overexpansion

It’s quite easy for management to get too excited in the beginning stages of business and plan for overexpansion without the capital to do it. This leads to exhaustion of funds and eventually to the failure of the business. Outsourced CFO services are perfect for startups, who need guidance on how to manage their finances and make sure that they don’t invest in new market territories before making the most of their existing market.

Lack of a business plan


This is an area where most businesses fail. They come into the market with short term goals and plans and find themselves lost eventually. Before starting a business the CEO and the CFO need to sit together and make a concise business plan of action for the long term so that they are prepared for any issues that might come their way, whether managerial or financial.

Lack of communication

A solid base for communication is the base of any successful business. Lack of communication between management leads to a lot of issues, as there will be no unity in the decision making of the company. Managerial staff should also be open to communicating with the staff and hearing their ideas, which are equally valuable in the company’s growth. Many managers are too proud to adapt to change or listen to advise from employees, an that’s one fo the key signs of a failing business.

Lack of financial planning

Lack of financial planning


There’s no denying that a business only lasts as long as its finances do. A company needs to have a capable CFO who will make the right decisions when it comes to financial investments, a project loan, and other expenses a company might have. A good CFO will find the right investment opportunities which will be profitable to the company and ensure that the company has enough monetary fuel to run on.

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