HubSpot for Startups / Jan 4, 2023, had an interesting article on the most significant factors for success for startups; and conversely what causes failure. There may be some helpful news for BAM startups. The following comes from HubSpot with the additions in italics being mine.
How startups can succeed in 2023
While the success of a startup depends on an array of different factors, there are a few things many successful startups have in common.
Raising capital is one of the most challenging aspects of building a startup. In fact, out of the 90% of startups that fail, as much as 38% do so because they don’t have the funds they need to proceed. It was recently reported that a BAM startup coffee retail in a former Soviet dominated nation, with IBEC coaching, closed its doors due to a lack of cash. It is not just an assumption; but is reality that it always costs more than one projects.
Another contributing factor that could determine a startup’s failure or success is having a market for the product the startup is selling. While this may seem obvious to some, as much as one-third of startups fail because there is not a big enough market for their product. Some years ago I was involved with a tourism company in North Africa. There was significant funding raised and a lot of work put into a plan and the recruiting of the team. They even did a good job of marketing but the market simply was not there due to transportation issues. The company was sold and relocated.
It’s also important for startups to have a team of passionate individuals committed to the company’s success. A startup is not a one-person show, and it takes a team of dedicated individuals to make a company succeed. I am surprised this study only suggests 14% of those that fail are due to team issues. Although I am unaware of any significant study of BAM companies, I have seen many close their operations because of team troubles. One I counseled starting in west Africa failed due to “trailing spouses” who simply were not prepared to live in the harsh conditions.
Being aware of why startups have failed in the past can help businesses prepare for the future. As startups continue to grapple with economic headwinds, a clear trend is emerging: companies that built a product with appeal and companies that manage their funds appropriately are most likely to prevail.
Larry W. Sharp, BAM Support Specialist, IBEC Ventures