Start-ups are always emerging, but yet only a small handful succeed and make it to the “big leagues.”  What could possibly cause these failures, and what can your company do it order to avoid following in these fatal footsteps?

Incompetence accounts for 46% of the failures within the start-up industry – making it the #1 reason for company failure. 

What do these start-ups do? They make these 4 common mistakes:

Incorrect pricing

Rather than basing price for a given service or product off of market research, some companies set the value for their product off how they “feel” it should be priced.  Always research your market so that your product or service remains competitive.  Likewise, if you don’t fully understand the market value of your good or service, it’s possible that you could undersell said product and actually put your company into debt.  Do your homework.

Expensive Building Costs

Sometimes a business will pick a location that appeals to them or makes their business “look good,” rather than pick the location based on a budget-viewpoint.   Do what works best for your business and is in-line with your financial goals and budget.  As a start-up, you need to concentrate on creating your company image through the eyes of your product, not based upon your office space.  If you focus on creating the best product or service for your target audience, the rest will fall into place.   Additionally, sometimes a business  may choose to work remotely from home, with an occasional weekly meeting in a local cafe as a company – this could be a great option for those companies that do not have a budget for rental space.

Lack of planning

It should come as no surprise that a lot of planning is needed in order to push your business ahead of the game.  However, sometimes an entrepreneur will just jump straight into the whirlwind of creating a business, without taking the time to carefully plan how this business will do with the given market demands.  In addition, if the entrepreneur does not take the time to sit down evaluate a financial strategy, then their business is doomed from the start.  It’s important for business owners to have a vision and concrete plan regarding how they wish to handle every aspect of the business, before the idea is put into motion.


Being a successful start-up is all about planning and doing your research.  Without this, you and your team will be unprepared to combat the competition and to drive in the sales.  What do you believe is the main reason most start-ups fail? Be sure to voice your opinion in the comments section.