Reason Behind The Failure of Startup Business In India by TryDigital


Today we will talk about why startup business fails in India within 5 years of operation. Explore the major reason behind the failure of a startup business in India.



A great initiative by Modi Sarkar about startup India but how the startup is working, facing difficulties and falling stats are unbelievable and today we will explore the Reason Behind The Failure of Startup Business In India.

Startup sounds very engaging and energetic, very fascinating and India is leading the world in startup culture but still, India has the highest failure rates.

You have gone through so many articles that 90% of startups fail in 3 to 5 years of the journey and that’s true so today we will talk about the most major reason behind the startup failure in India.



Major Reason Behind The Failure of Startup Business In India.



Lack of Uniqueness In Idea.

Most of the startup mentor and venture capitalist not able to find a unique and fresh idea. Failure major reason in all the startup is an idea. Lack of uniqueness is also becoming the major reason for the failure of a startup business in India.


Copying an Existing Business

Copy of existing business in different states and counties won’t help you at all. Copy the business moels and make little changes might be giving the success but failure rate is very high.

Very region and country have it’ own people and everyone’s style is different so a copy of a business model is not a great idea at all. This is the other reason for failure.


 Less Informative Business Plan

Another major reason behind the failure of startup business in India is a less informative business plan. Founders take it very casually when it comes to making a much informative business plan.

Your informative business plan should contain all about business incorporation to staff hiring, fund management, funding details, future scope, possibilities of failure and success, planing for good and bad times in business, marketing strategy, Pricing of product & services, Founders and other key player roles and responsibility and most important existing plan.

Later they failed measurably because of a lack of information and un plan strategy execution. They failed due to legal issues, They failed due to the fund crisis, the startup failed due to management, another reason for failure is a marketing strategy.


Legal Problems Become Failure of Startup.

Legal planning is part of whole business planning before the incorporation of a business. Startup founders start in a hurry and avoid and neglect all the legal responsibilities because they found consulting a great legal advisor is a waste of money.

As we know there are huge penalties for all kinds of business in India if you will won’t follow the instruction. Before making the decision to register your business and make a legal entity then must consult the CA and other known startup business consultant for once.

Ask the consultant about all the compliances and responsibly of your entity type like LLP, Partnership, Pvt, Ltd, etc.


Lack of Experience In Marketing Strategy.

We all have a certain kind of expertise in website development, accounts, marketing, digital marketing, HR, legal Etc but once you decide to do that all itself then arise the issues.

Indian startup does a lot of mistakes while choosing the right marketing strategy to promote the business and startup in the right direction at the early stage of operation.

Most of the startup invests in marketing strategy which will give the zero return and bring business to the financial crisis. Marketing is not starting a facebook and google ads for your business.


Poor Management Become Failure of Startup In India

A poor management team is more dangerous than a fresher employee in the core development team. Business success and failure depend on them. They take all the decisions for the growth of the business.

If you hire and deploy a poor management team for your startup operation then it is very difficult for any idea to get success.


No Market Research Before Launch.

So many startup businesses start without proper market research and analysis because they found their product is and services are unique and out of the box.

The business won’t run on your choices because businesses run on the buyer’s choices. Ask buyers about their opinion about the product you are going to introduce.

Yes, we agree that product and service are unique but who will buy that product and services?

Have you research that people are interested in or not in your product & services. Invest money in research and save lots of effort and capital for itself.


Market Solowdonw (Slow Economy).

Timing is everything because if you build and great product either proving the best services in the market but due to market slowdown no one comes to buy as you expected then timing can be your failure of a startup.


Cash & Fund Crisis For Failure of Startup In India.

Sometimes cash and fund crisis comes naturally because every kind of business faces the same. Sometimes cash crisis in business comes due to less informative strategy. Like unplanned marketing expenses, hiring the resources and many more things


Credit Facility Issues.

After all the effort from the government of India still, a credit facility for a startup is very difficult.  Very difficult to raise a fund for business at the fund crisis.

Most of the business died in the country due to lack in credit facility from banks & other financial institutions. We found transparency issues in all the leading banks who promises an easy business loan and all.


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