If your daemon is of Type=forking then failure to initialize should be indicated by the initial process (the one launched by systemd) outputting an error message and then failing.

Only once the grandchild (not the child, you must double-fork in order to start up correctly) has indicated to the initial process that it is ready to provide the service, should the initial process exit, cleanly, thereby notifying systemd that startup was successful.

See daemon(7) for the full details.