10 warning signs to close your startup

Only 10% of startups usually exceed two years of life. Being successful when starting up on our own is not so easy, and many business ventures fall by the wayside. Being careful to be aware of the symptoms and alerts that can close your startup is of vital importance if we do not want to throw our effort, time and money in the trash. So let’s take a look at 10 warning signs to avoid closing your startup.

When an entrepreneur creates his startup from an idea in which he believes, he ends up getting so attached to it that he comes to consider it as a son. This means that it is more than a job, and he will dedicate much more effort, extra time and invest more than expected to make it work. This entails an unexpected risk: many times we are not able to assume that the company in which we have placed so many hopes does not work and before leading us to ruin, it is better to close it or leave it inactive.

How do I know if my company is going under?

Entrepreneurship is like a roller coaster: there are ups and downs, a cycle that repeats itself frequently during the life of a company; but at some point the fall becomes dangerous and there is no way to get back on track. It is essential to learn to detect the first symptoms. Of all the startups that are created, only 10% usually exceed 2 years of life, so if we do not want to throw our effort, time and money in the trash it is important to know how to detect when a company begins to not work, before the blow catches us unawares:

10 warning signs to close your startup

  • The expenses are greater than the income, and as time goes by, the difference becomes greater and greater.
  • There are problems between the partners and they are almost always in disagreement.
  • Lack of financial capital; after the FFF (family, friends and fools) investment, no public or private investment has been obtained to continue.
  • If the company is not scalable, it will hardly receive investment and you will have to assess whether it is viable to continue with a company whose growth is stagnant.
  • If you discover that the market you are targeting does not exist, is too small or has changed abruptly, you should know that it is not advisable to attack it.
  • If the initial idea does not work and you are not able to pivot, the company will close before it has a chance to develop.
  • Poor management of both the team and the company can lead to ruin. Many companies die because of cash flow.
  • If we do not identify the customer of our product or service we are doomed to failure. Is a mistake consider that your customer is any person with a smart phone with Internet access.
  • In terms of sales, we must find the optimal time to launch our product on the market. Going too early or too late can ruin all our efforts.
  • Don’t network; to sell you need to be on the street. If you spend most of your time in your office, it is a clear sign that you need to network more.


What options do I have when my startup starts to fall?

  1. You can close the company definitively, which entails closing costs.
  2. You can leave it in standby, without activity; it does not have extra expenses, but it does have tax obligations, such as the duty to maintain a self-employed person in charge of the administration of the company.
  3. You can change activity, which is colloquially known as pivoting in another direction different from the original one. This can save the business, but it also entails extraordinary expenses.
  4. You can sell it, if there is an entrepreneur or entity interested in acquiring it; in this way we can make a profit, reuse the work we have done and pay for it.

Entrepreneurship is not an easy way and giving up the dream of setting up your own company and moving forward with the project you have been looking forward to for many years is a hard blow for anyone, whether you are a beginner or you already know what entrepreneurship is all about. In the business world things do not always go well, no matter how hard you fight and try to recover from failures and obstacles. Our advice, as a last resort, is to face reality and do not let yourself be dragged down by the obstacles.

Having an ally to help you boost your business will always be an alternative that reduces the risk of closing a startup. If you want to start a business, start with Minerva 🚀.

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