Why Do Startups fail in their First Three Years in Ghana?
Updated: Oct 21, 2019
Around 90% of all startups are failing in the first three years of existence, sometimes even a bit faster than that. There are many reasons why this happens, but more often than not, it all comes down to not having a good plan and spending funds inappropriately. Once you do that, it will be very hard to grow your business, and actively take it to that next level. But there are other reasons why startups fail, as you will see below.
The market doesn’t really need their product
Around 42% of startups tend to fail because they lack a market need for the product. It’s important to study the market to ensure there’s a need for what you want to create. If no one is interested in what you have to offer, then obviously the product will fail. And the startup will eventually fail as well.
A lack of vision and competence
You need to make sure that you find right people to lead your business and grow it properly. The lack of good leadership skill is one of the major reasons why startups fail. It’s important to have great leaders, and the right vision already in place. If the leader is someone that never worked in the industry before, then that can be a huge issue. And if the team is not solid and experienced or hard-working, then these can also be problems that your business will have to avoid.
Focusing only on building, and not the customers
This is another issue, you can’t create a company without putting your customers first. Sure, you want lots of growth right from the start, but if you don’t focus, on your customers, and their needs, that will be an issue. This is why you always have to go with a customer-first approach if you want them to have the best experience. Company growth will come through that, so, you will get the best out of both worlds.
Being a one-person team
No matter how good you are, you will not be able to grow a company alone. You need a talented team to help you. Trying to do everything on your own will get you over burned, and in the end that’s something you really want to achieve at the highest level.
Scaling too much at once
The best way for a startup to grow is through gradual scaling. It works for any startup in Ghana and all over the world. If you try to hire too many people, but the income isn’t there, you will have problems, and that’s definitely something that you want to keep in mind.
No secondary plan
There’s no way to know if your business plan will work or not. That’s why the ideal thing is to have a secondary plan. The more prepared you are for any challenge, the better things will be, and that’s what you want to consider and prepare for all the time.
A lack of investors
You need a great, clever business idea to get past any other competitor. If your business idea is interesting but not the best, investors will think twice before giving you any money. And that can end up being quite the challenge if you want a solid, powerful startup. Which is why you need a solid, unique business idea that shows a lot of promises. That’s the only great way to acquire investors! As you can see, it’s straightforward for Ghanaian startups to fail if they lack the right amount of planning and guidance. It’s going to be quite the challenge to achieve that, and that’s why we recommend you to focus on growth and value more than anything. The more you focus on hiring the right people and gradual growth, the better things will be for your company!