Why Startups Fail

[mandy]

A survey done by the U.S. Commerce Department stated that of every 10 small businesses, seven will survive their first year, three will still be going after three years and only two will remain after five years. These are quite startling numbers and really beg the question: "Why do startups fail?"

The answer is amazingly simple and can be reduced to three main causes: lack of working capital, a poorly conceived business model and a poorly constructed business plan...

As an entrepreneur, I can certainly understand the enthusiasm and aggressiveness that are needed elements to starting a new business. However, my experience tells me that this enthusiasm and aggressiveness must be tempered with a large dose of realism. We should always be asking ourselves "what-if" questions. What if our business model takes longer to execute than we planned?...

full article: http://ecommercetimes.com/story/PwnRQ7iR...Fail.xhtml

[mandy]

A related article:

An oft-cited study estimates that just two-thirds of all start-ups see their second birthdays, and less than half make it to their fourth.

Whatever the exact figures, no one would argue that scores of budding new ventures die on the vine. One of the most common killers: lack of focus.

With precious few resources to expend, hewing to a specific, well-defined vision is critical for start-up companies. When entrepreneurs attack too many problems or chase too many opportunities at one time, they often end up with nothing to show for it...

full article: http://www.forbes.com/entrepreneurs/2007...ilure.html