A staggering 90 percent of startups fail. Lack of experience, poor cash management skills, and legal challenges are often the culprits. Like it or not, having a great idea or an amazing product doesn’t guarantee your success.

Most startup founders think they’re building the next big thing. Some have innovative projects that could change the world. Yet, they are forced to close their business before it even gets off the ground.

As an aspiring entrepreneur, the best thing you can do is to learn from their mistakes.

Research other businesses in your niche, identify their strong areas, and try to determine what they’re doing wrong. Always have a backup plan and consider any potential issues that may arise along the way.

Not sure where to start? Let’s take a closer look at the most common business problems all startups face – and how to deal with them.

Why Do Most Startups Fail?

First of all, make sure you understand the reasons behind startup failure. This will help you anticipate potential problems so you can take the steps needed to get your business on the right track.

Approximately 42 percent of new companies close their doors because there’s no market need for their products or services. About 29 percent run out of money. Another 23 percent simply don’t have the right team, while 19 percent get outcompeted.

Other common reasons why startups fail include poor marketing, disharmony among team members, and lack of planning. Some newcomers ignore their customers or launch their products at the wrong time.

As you see, the success of your business depends on several factors. No matter how great your idea is, it’s necessary to consider all of these factors before getting started.

For example, you can prevent financial issues by applying for grants and securing funding.

Whether you’re planning to launch a new company or grow your startup, be prepared to face these common business problems:

Lack of Finances

Unless you’re already wealthy or you’ve been saving for years, lack of money can be a problem. Since your business is new, most banks aren’t going to give you the money you need. Investors will hesitate too.

Even if you do have enough money to get started, you’ll need even more as your business grows. After all, it’s necessary to purchase equipment, invest in new software, and hire people.

Try to secure funding before starting your business. Meet potential investors and tell them about your idea. If your project looks promising, you might receive the money you need to get the ball rolling.

Another option is to apply for private and public grants. Check out Grants.com, NASE, SBIR, and other organizations.

Be prepared to invest time and effort into your grant application. Draft a proposal and a business plan, estimate your revenue and expenses, and define what makes your business grant-worthy.

You’re competing against hundreds of other startups, so don’t expect it to be easy.

Finding the Right Team

As a startup, you may not afford to hire top talent. Business professionals who have years of experience behind will expect to be paid accordingly.

Your best bet is to employ people who can wear multiple hats.

For example, you could hire a digital marketing specialist who also knows a thing or two about web design and SEO. Or you can search for a personal assistant who can do accounting work.

Working with freelancers might do the trick. However, this isn’t a long-term solution. If you want your startup to grow, it’s important that you build a cohesive team.

Poor Planning

Many startup founders are creative and passionate about their work. However, this doesn’t necessarily mean they’re skilled at business too.

If you fail to understand how a business works, you may not be able to plan things properly, hire the right people, and make strategic decisions. Poor planning is actually one of the most common business problems startups face.

Draft a plan that covers all areas of running a company, from funding and development to marketing. Estimate the costs involved and be realistic about your expenses.

Consider hiring a business consultant to help with these things. Discuss with a tax advisor as well. Consulting a lawyer won’t hurt either.

Strong Competition

No matter your industry, the competition is fierce. Whether you’re into technology, retail, or healthcare, you’re competing against hundreds or thousands of companies that may already have a customer base.

Try to learn from your competitors rather than ignoring them. Study their business model and marketing strategies. Determine what makes them successful and where they fail.

Don’t try to reinvent the wheel or make false claims about your products just to stand out from the crowd. It won’t work.

Define your unique selling proposition and then plan your marketing efforts around it. The first thing you should do is merely be different.

Analyze your audience and its pain points. Look at industry trends and try to identify gaps in your industry. Also, try to identify areas of improvement in your competitors’ strategies so you can outperform them.

Low Customer Demand

As a startup, you can’t expect customers to simply come to you or believe that your products are amazing just because you say so. You first need to build your reputation and generate demand for what you have to offer.

Assess your customers’ needs and wants. The better you know your audience, the higher your chances of success.

Research the market, give special deals to new clients and be creative with your marketing efforts. Don’t just do what everyone else is doing. Get out of your comfort zone and try to be different.

Take Your Startup to the Next Level

Startup life is anything but easy. Be prepared to face challenges you’ve never thought of. You’ll fail more than once – and that’s perfectly fine as long as you learn from your mistakes.

Try to anticipate the most common business problems so you can address them before they escalate. Put your customers first and address their needs. Be open to feedback and leave your ego at the door.

Most importantly, don’t hesitate to ask for help when you need it. Contact me today to talk about your startup and how to make it thrive!