Why New Business Start-Ups Fail Essay Example | Topics and Well Written Essays - 2250 words

Why New Business Start-Ups Fail - Essay Example According to the research findings, it can, therefore, be said that a sound business idea is critical for the establishment of any business. Most business start-ups fail especially in their first year due to lack of a transformative idea that can be channeled into meaningful activity. When investors get ready to invest in a business, an area of concentration is on those entities that are scalable, and this decision is made based on the soundness of the ideas presented. This means that businesses that have a wide mandate in the market are never a viable option for potential investors. Investors always go for those businesses that are not general but specific with respect to some target market. To this extent, start-up businesses fail in the sense that there is no idea that that is specific to the businesses that are being established. For start-ups, the experience is a big issue given that the business entities are still new, and with no proper market survival techniques or experience needed for their sustenance. As such, quite a number have failed, without the owners acknowledging the need to have hired appropriate personnel to bridge the skill gaps. Experience in a business entity has all to do with knowing the right forecasting methods, cost structures, and resource utilization. In this sense, it becomes possible for businesses to engage in risky affairs that can lead to failure, and without adequate experience, will likely fail. Upcoming businesses should learn from failures of the former and realize that the short period served in the market is as a result of having no experience in a particular line of business.