Oftentimes, most startups fail within the first two years since they haven’t prepared enough and gotten all of their market research done correctly. For the ORM Agency, they see things like this every time, being a startup themselves it is important to know how much profit you are making by keeping track of it and seeing when it is time to let go of your business.
Every business goes through difficult points where you expense more than you anticipated which is normal but if this is on a month-to-month basis, then there is a problem and you know you are probably losing more money than you are actually making. The thing about startups is you have to hire employees and need to make money in order to attract qualified employees and be able to retain them.
There is one entrepreneur David Stone who was living the big company corporate life and the startup life and he has been involved in 8-9 startups and he founded or co-founded three of these. Most entrepreneurs feel satisfied when they are able to build something new from the ground up but if that something new isn’t working out, then you need to know when to let go of it. With his experience, Stone ran a company called Personal Health Management where it was the early 2000’s and this company had tried to develop health and fitness monitoring wearable devices yet there were no mobile phones and no Bluetooth. He realized that the choice was to wait a long time and invest 50$MM or to close up. They decided it was best for the company to close their doors since it was too early to introduce wearable technology then.
Sometimes it is hard to decide when to give up on a startup or on a company but there will be signs there. Just make sure that if you want a startup to succeed, you need to remember to do all your research carefully on the target market, the demographics, the market itself and especially the competition in the market you are trying to enter. Also, never forget about the growing trends of each market and pay close attention to this.