The world of startup is fast moving and can be extremely profitable for those who are the most productive. Problems occur in every business but it is those problems that weren’t seen coming that can do the most damage. Kneejerk reactions to problems rarely are the correct response to an issue. Taking the time to think out a variety of circumstances or problems you can have while preparing for others is the wisest strategy. Proactivity can help quell many problems with a startup so it is important not to procrastinate when it comes to preparation. The following are unforeseen problems that can hurt or possibly put a startup out of business.
Employee Hurt and Suing
An employee being hurt at your place of business can be devastating if you do not have insurance to cover this. A personal injury lawsuit can cost thousands in legal fees with a settlement drying out the rest of the cash flow of the startup. With lawyers like those at it is wise to invest in some business insurance. Employee paperwork that has to do with injury on the job should be written up to protect both the employee as well as the company. Wrongful termination lawsuits can be common in startups as many startups do not have the firing process completely figured out. Allow an outsourced HR firm to handle these things as it will keep your startup safe at a fraction of the cost that it would to staff an entire HR department.
Leaked Employee or Customer Data
A data breach can spell the beginning of the end for many startups. Losing the trust of valued clients by having some kind of breach can cripple startups even if the business relationships were strong. Leaked employee information can lead to a huge drop in productivity as many employees will be checking to see if their identity has been stolen. Information can also be leaked by former employees with a vendetta against the company. This information could be sold to competitors or simply be used to ruin relationships the startup has worked hard to garner. can help decrease these happenings as nobody wants to be taken to court for leaking valued information.
Problems Getting a Client To Pay
You delivered the work at the highest quality possible and now your client has ghosted you. Even though everything went according to plan there are some clients that it will take quite a bit of negotiating or threatening with lawsuits to get them to pay. This is not a great way to do business but it is the way certain companies operate as they simply think a company will drop the issue if the sum of money is low enough. Client payment terms can help eliminate these problems as upfront payment can solve most of these problems. Clients that have had issues paying on time in the past should be required to pay upfront. A large client delaying payment can put a startup out of business as they might need to take out a loan to simply pay the staff. for smaller startups working with larger corporations are imperative in today’s startup world.
A Juggernaut Has Entered Your Niche
Having a huge corporation enter your niche of business can end a startup. The advantage that a smaller company has over a large corporation is flexibility in decision making. Larger corporations often times have to go through a variety of channels to get approval on one simple decision. A startup can often times deliver faster and for industries where turnaround time is paramount this can be the answer. The startup can also market in a much more creative way in order to get the most out of their marketing budget. Many clients would rather work with a smaller company as a personal touch can make all of the difference. One client manager instead of a revolving door of client managers is much more comforting to many people making business decisions.
The startup world will continue to thrive with billions upon billions of dollars to be made. Getting your business going will not always guarantee success but it is an accomplishment nonetheless. Take the above into account and react accordingly if your startup encounters these situations.