Why Startups Fail
Lack of capital.
Whatever you budgeted for, double it. If this is your first startup, quadruple it. Then raise twice as much money the budget calls for.
Lack of spending constraint.
Hiring ahead of the curve and incurring premature overhead. If you must lease a space, get half of what you want on as short a term lease as possible. A month to month sublease would be ideal.
Not enough focus on sales.
A business is nothing without revenue. Don’t spend your first six months writing employee handbooks and choosing a logo. Do not start any business without clients already lined up. There is plenty of time for handbooks when you’re making money.
Reliance on business plans.
Many businesses develop elaborate business plans with graphs and research and then blindly follow the plan off a cliff. React to opportunities; don’t drive past them. If you start as one company but find a nice in another area, pursue it. Follow the money. I have never worked with a successful company whose operations after two years resemble in any manner their original business plan. In fact, most would be hard pressed to even locate their original plan.
Too many chefs.
If you must have a partner the roles, legal organization and the like should be clearly defined. At least one of you should be an outstanding rainmaker. Choose anyone you go into business with more carefully than a spouse.
Bad and/or too much advice.
The first thing to know about advice is never listen to anyone less successful than you. The second thing to know is to understand the perspective of those offering the advice. Bankers, accountants, lawyers and your brother-in-law all have excellent things to say but they all have their own perspectives. Accountants make your business look ready for Chapter 11 to avoid taxes but see what your bankers say when you take them the same numbers. Your lawyer wants you to spend half of your revenue insuring against risks or drafting lengthy agreements for even minor transactions. You can minimize risk all the way to bankruptcy court. Everything should be in balance and matched against a business goal. List to everyone’s advice but make your own decisions.