There’s a buzz about start-ups today. There is a mental image of young people who are busy doing cool stuff to establish their business.

The reality is very different, though. Starting a business, whether that’s establishing a tech start-up or a captive insurance company formation is complicated and can be stressful.

Common Pitfalls for Start-Ups

What are the usual problems faced when establishing start-ups? Here are some of those issues:

Lack of Funds

The main problem faced by newly established start-ups and any business for that matter is the lack of funds. A survey once showed that 79% of all small businesses which failed claimed that starting with too little money as the main reason why they failed.

Many aspiring business owners borrow money based on how much they think they will need when they’re business succeeds as opposed to the worst-case scenario. So, when their businesses encounter problems, they fold up immediately.

Bad Marketing

Another common problem made by start-ups is to go ahead with expensive marketing campaigns without really studying their target market. Those campaigns all go to waste.


To avoid this, start-ups should conduct an extensive market research first and determine who their customers and audience are. The advantage of digital marketing is that it can be targeted. You can focus your campaign on your target market. It would be best if you can get the services of digital marketing experts who can handle things for you.

Not Having Enough Time

Business handshake

Many of those who try to establish start-ups have full-time jobs. They are unable to resign yet because they are unsure if they will earn from their new business. That means they cannot fully dedicate their time to running their business. The problem is that running a start-up is often the equivalent of a full-time job or even more than that.

Going DIY

Another mistake that many start-up business owners make is that of trying to do everything on their own. Typically, this is done to save money, and it is understandable. Sometimes, however, trying to save money by doing things on your is a significant mistake.

There are cases you need outside professional help. For example, to run a successful marketing campaign, you may need a digital marketing expert. To build the website for your business, you may need help from a professional web designer.

Wrong Prices

It is not easy to determine the right price for a product or a service. There are a lot of things that you need to factor in determining the price. Pricing a product too low means that you will not make any profit. If you price your product too high, then you might not get customers. So, you must spend time determining the right price that you will be charging for your product or service.


There are a lot of mistakes that you can make when you are establishing a start-up company. Nothing is surprising about that. By knowing about the possible errors ahead of time, you can prepare for them.

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