If you have a startup business, you should realize from the get-go that the long-term survival of your startup is unlikely, statistically speaking. For every startup idea, very few ever get off the ground and even fewer are still around in five years.

Admitting your startup has failed can be difficult to do, especially if you’ve poured your blood, sweat and tears into the company. But here are a few reasons that should make you consider closing up shop and moving on:

No sign of profits in the horizon
If your company is constantly losing money or simply not producing enough money to warrant the time you spend on it, that’s the main sign that it’s time to admit the startup is a failure. However, be sure to give your startup a fair chance. In the online world, two years is usually the amount of time a startup is given to show some signs of life.

Loss of passion
Most startups are brought into life due to a passion one of the founders has bout the specific field or industry. If that passion disappears, it can be very difficult to keep going. Instead of fighting the feeling, consider selling or closing the startup.

Too much quality competition
If you have direct competition that has a better product that is available for less money, that’s an ominous sign. A good rule of thumb is that if you can’t rationalize why someone should utilize your product or service over the products of your competitors, a new direction is needed.

Self survival
If you are trying to support a family with a startup business and you can’t make ends meet, that is probably a sign that you need to figure out a new plan. You don’t need to necessarily shut down your startup, but harming yourself and your family to chase a startup dream rarely makes sense — especially if the chase has lasted a number of years.

Startup Failure (Image: Flickr)

While there have been hundreds of startup search engine websites in the last few years, one such startup that actually started to gain momentum was Cuil.com. Going live in late July on 2008, Cuil was seen as a serious challenger in the industry and some experts thought that they could challenge Google eventually.

Cuil got much of its early fame due to its famous backers. Ex-Google employees Anna Peterson and Russell Power were joined by CEO Tom Costello, who formerly worked with IBM. Venture capitalists evidently also saw the potential and invested more than $30 million into the company.

When it launched, Cuil claimed to have the largest index of webpages of any search engine (more than 120 billion). But after an initial drive of traffic, Cuil’s problems began to surface. Users reported irrelevant and even inappropriate search results. Even worse, Cuil.com was oftentimes slow or totally unresponsive.

As a result of their issues, Cuil’s strong start began to evaporate. According to Compete.com, Cuil had in excess of two million unique visits in July of 2008. However, that number dropped by 80% by September and by more than 93% by March.

Although the search engine is still alive and kicking, Cuil is no longer viewed as a serious threat in the search engine industry. In fact, once their initial venture capital runs out, Cuil could very well be forced out of business.

What can startup companies learn? First of all, it’s important to do extensive testing prior to launching something as significant as a search engine. Additionally, any slowness or downtime can cause visitors to leave your startup website and never return. Too bad Cuil had to find out the hard way.

Can Cuil Survive? (Image: Cuil.com Screen Shot)

INDenverTimes.com is a recent startup online business that came about after the closing of the Rocky Mountain News. Basically an online newspaper, INDenverTimes.com says their goal is to bring the “most insightful news, perspective and analysis in Denver using the most advanced and innovative technologies available” .

Rocky Mountain News was a newspaper in the Denver area that was around for 150 years. But with the newspaper industry in the United States in extreme trouble, the Rocky Mountain News was folded in February.

According to reports, INDenverTimes.com may already be in trouble financially. It was to be launched during the first week of May as long as they were able to secure 50,000 paid subscribers. However, they were only able to get 3,000 paid subscribers.

We’ll contact INDenverTimes.com to see if they plan to continue with the startup process.

INDenverTimes.com (Screen Shot)

If you are looking to start a technology business in the UK marketplace, you have the opportunity to win a trip to Wales, where you will take part in one-on-one sessions with professionals to learn more about UK legal and business practices and strategies.

This annual business planning competition is designed to assist companies with high growth potential to develop business for the U.K. and European market.

Solar Cells - Image: sxc.hu

The contest, dubbed the Technium Challenge International, is geared towards IT, biotech, sustainable technology entrepreneurs. The winner from the United States, along with finalists from 12 other nations, will be flown to Wales for a week-long “Learning Journey” where they will meet with many of the countries top business experts. The overall winner will earn a year of free office space within one of 11 Technium incubators in Wales and ongoing assistance on financing, business planning and technical issues.

Contestants should submit a brief summary of a current business plan (lengthy proposals not needed for the preliminary application) that outlines the strengths of their product. If you already have a business website established, supply the link to the site.

U.S. entries must be submitted by March 27, 2009, to IBW American representative Chris Williams via email.

The applicants will be narrowed down to a short list by April 24, 2009, then there will be a final round of judging to determine the U.S. winner. The American winner will be announced on May 1, 2009. To learn more about the competition, go to technium.co.uk/challengeinternational.

If you have a startup business, it’s important to research to figure out what business methods and which business plans succeed. However, it is also important to understand where things may go wrong. With that in mind, here are the top five pitfalls for startup businesses:

Idea Lightbulb - Source: Flickr

5. A lack of courage. When entering any business field, you have to be confident in your startup from the beginning. If you don’t believe in what you are doing, you can’t expect anyone else to believe in it.

4. Poor planning. It’s simply not possible to have a successful business without a plan. You should also plan at least two or three steps ahead. Doing so will help you navigate your startup business in the right direction.

3. A lack of focus. Picking a niche and sticking to it is extremely important. While it’s tempting to start dabbling in other niches along the way, that is a pitfall that can be disastrous.

2. Poor budgeting. Money doesn’t grow on trees. You have to spend your money wisely — especially in the early years. Cut corners were possible and treat every dollar as an important asset.

1. A lack of effort. Having a successful startup business is hard work and it’s definitely not for the faint of heart. If you work harder than the competition, you greatly improve your chances of success.

When you are in the process of coming up with ideas for a startup business, there are many things you have to consider to figure out whether you have a viable idea. Here are five questions to ask yourself about your plan for a new business:

Photo credit: sxc.hu

5. Can you make the time?
Not many people can quit their day job and focus strictly on a startup business. With that in mind, the first question you should ask yourself is whether you have the time to see your idea through to the end. Time is an essential yet underrated aspect of any successful business model.

4. Do you have the necessary knowledge?
Depending on the field, a lack of knowledge usually is a death knell for a startup. If you don’t have the knowledge yourself, you should have clear ways to add people to your team who can bring the necessary know-how.

3. Can you come up with the startup costs?
You can have the best business idea in existence but if you don’t have the means to come up with the needed startup money, the idea isn’t worth much to you. In fact, you could damage your personal long-term financial stability by trying to reach an unrealistic startup dollar number.

2. Do you understand your target demographics?
In just about any business, knowing your customer is extremely important. If you don’t know what and who you are targeting the other end of your business plan, you are basically just throwing pebbles in the dark.

1. Do you a passion for the idea?
This question is number one for a reason. Without passion, it’s almost impossible to head a successful startup business. You need the boundless motivation and drive to see the startup from its infancy to its growing stages and finally into adulthood.

Well, the reports are out.

The National Small Business Association is reporting (based on its 2008 Year-End Economic Report) that things are looking pretty bleak for small business owners this year. And those surveyed are pointing to the recession as the reason why their profits and growth will be extremely limited in 2009.

And according to a recent Gallup poll, almost half of small business owners say their revenues decrease last year - and are expexting more of the same by cutting their spending this year.

So so you want to join all these small businesses?

I didn’t think so. And although you need to be realistic in what’s going on out there, I am sure businesses can thrive in a recession.

But you can’t do the same things you did before. They’re just not going to work - and could actually hurt you.

There’s plenty of evidence that businesses which market wisely, compared to those who continue with the same strategies used prior to the recession, will be the ones do well. Penn State’s research, for example, showed that firms who had a strategic marketing plan with an entrepreneurial spirit had a competitive advantage.

So stop with the doom and gloom already - and start creating a great marketing plan.

Image credit:  gothicburg, on Flickr

Remember when domain squatting was a BIG deal? You know, when a person bought a domain with a specific company name and basically holds it for ransom, like the famous case of Madonna, who had to sue to get ownership of Madonna.com.

Well, it’s happening again, but this time on the microblogging site Twitter. Some of the big names that are being squatted include Tim Hortons, Sears and Coca-Cola.

What is really bothersome about this trend is that many squatters can tweet malicious and bad things, basically smearing a company’s reputation.

It happened recently to Exxon-Mobil - and it can happen to you.

The smart start-up or small business would be heading over to every major social media site and grabbing their name, even if they never use the accounts.

And if someone has hijacked your name - and you can’t get it back by going to the socal media provider, monitor it carefully.

Image credit hmvh, on Flickr

Who doesn’t? Especially when your are working 80 hours a week to get your business off the ground.

Have you considered outsourcing?

I know many people think that they can’t afford to add outsourcing to their budgets, especially in these economic times. You need to make money go further. If you’ve already cut your expenses to the bare bone, it may seem impossible.

But you can do it.

The key is to calculate what your time is really worth and if the tasks you are doing are worth that hourly wage.

For example, if your skill set is business development, doing the billing or creating a website may take up more time and energy than needed. Perhaps this is something that is worth handing off.

Remember, however, there is some cost involved, especially when ramping up an outsourced staff person - or if you happen to pick someone who fails.

I suggest outlining the task(s) with as much detail as possible, including what’s expected, timelines and deliverables.

So Pownce, once dubbed “The Hottest Startup in the Silcon Valley’, is closing December 15.

Why did it fail? I see several reasons:

1. It wasn’t unique enough. Twitter had already gotten a hold of the micro-blogging market. Although Pownce really started to make waves when Twitter was having server issues and PR problems, it wasn’t THAT different from Tweetland to keep people using it.
2. Have a plan to make money.  Sure, they had premium accounts. But how many? (I certainly wouldn’t have paid for one!) They needed to find a way to make a profit in order to keep going.
3. Don’t get too big for your britches. Kevin Rose backed Pownce, which was a good thing. But it seemed he got a little too cocky with it. (And he used Twitter as well! Come on Kevin, use your own stuff!)

Image credit: nochuckingaround on Flickr