The rise and fall of eCommerce stores

With the increase in engagement on digital platforms, many businesses have moved to eCommerce stores but the problem is that many of them enter into a market they know very little to no information about, now we’re going to look at some of the reasons why and also advice from other founders who overcame these failures.

Why do eCommerce stores fail within 3 years?

In 2020 4.4 million applications were received by the U.S Internal Revenue Service for new business stated by the Bureau of Labour Statistics. COVID 19 has factored in shattering almost 30% of small businesses, it is also responsible for the 21st century’s greatest surge in entrepreneurship. For new entrepreneurs in the market sustainable success would be statically unlikely. One approach to raise the odds would be to learn from current and past entrepreneurs.

Factors that contribute towards startup failure

The question is why do these startup businesses fail? Studies conducted showed that 70% of entrepreneurs face potential failure in their business, with nearly 66% of them facing potential to fail within 25 months. Other factors to look at as well are that more than one-third of founders stated that running out of money to sustain the business led to failure as well and not having a business plan or model. Factors that contribute to business failure significantly change all the time, with money and finance being the main reason and lack of market need recently joining. Legal challenges also must be considered due to the increase in regulations of digital companies.

What are pivot strategies and how can they be used?

Some founders willingly pivot which tends to raise their odds of success. In a survey conducted with 150 founders, 55% reported pivoting helped avoid failure and nearly 75% of the founders stated that pivot resulted in success. These are some of the pivot strategies that can be used, most founders stated that they pivoted by updating or improving their business plan. A bad business plan is the most frequently reported as failure so it should be done with vision and purpose. 13% of founders stated that they attempt to pivot by securing additional funding or investors. This pivot is very rare but very important given how common start-ups fail by running out of money or not securing enough funding. New entrepreneurs starting up can also look at other founders’ mistakes to help anticipate and manage preventable failures.

Tips and Tricks from Other Founders

Founders who went through similar failures were asked what advice they would give to new Founders, here were some of their responses: “Listen to your customers, be passionate about your product, focus on your core product before expanding”. Successful founders are described as those that surround themselves with experts and mentors who have encountered and solved the challenges endemic to building any start-up.

Startup Success

In conclusion, aspiring entrepreneurs should do research, plan and prepare better. Do not leave money to chance. Pivots raise the odds of success. Learn from shared mistakes.

Here at Catch The Beat, we help you find solutions that are specific to your business, so visit our website and see how we can help you expand your Kingdom!