The sad fact of business is that most startups will fail after two years of opening up their doors. There are a lot of different factors that can cause a business to fail. Inefficiency, poor planning and the ability to deal with growth are some of them. Others, however, fail because of their inability to spot those glaring threats facing their business. Legal threats, financial threats and the threats of crime. Those forces, external and internal, that you need to protect yourself from. Here, we’ll look at some of the deadliest of threats and what to do about them.
The problem of people
One of the threats your business will have to contend with most often is in your own workplace. Most lawsuits a business faces comes from its own employees. The most common are related to accidents, which can be solved with a health and safety plan. Beyond that, it’s all about employment. About hostile workplaces, harassment and termination. Ensuring your business doesn’t cross any lines in dealing with these is all about setting up a proper HR procedure. Make sure every dispute is recorded and that guidelines on how to deal with employees are followed. Particularly in regards to terminating employees. You need to document and retain records of tardiness, poor performance or a lack of productivity. Those records are important particularly in proving lack of discrimination.
Competition from the outside
Naturally, there are people outside the business who can be a threat, as well. In particular, we’re talking about the competition that already exists in your market. They pose the risk in that they’ll be very willing and able to steal your customers if you don’t do something about it. For one, you should consider the alliances that can help you against a bigger competitor. Cross-promote with other established companies to give your name a boost. Most importantly, you need to make sure you’re competing by providing something different. Don’t race to beat them at the game they’re playing. Beat them at the game they’re not playing. Follow your own roadmap, not theirs.
Competition from the inside
Perhaps even more serious than external competitors are those who rise up from inside your own business. If someone quits, they may think it’s a great idea to take what they’ve learned and use it to start their own business. They can copy your processes, even use their personal relationship with clients they’ve dealt with while working for you. In reality, this is them, using the resources you’ve spent a lot of money and effort to build. So sometimes a business needs to ensure they’re restricting their own employee’s ability to do this. Creating an enforceable non-compete clause as part of the contract, for instance.
Keep what’s yours
If there’s one thing that competitors of any size can use to really undermine you, it’s your intellectual property. Your ideas, how you deliver solutions, even your name, logo and personal branding need to be protected. Otherwise, there’s nothing stopping copycats from ripping them off wholesale. This can steal customers away from you and cause a lot of damage to your brand and reputation. In the worst case scenarios, they might even start trademarking and copyrighting before you. You could lose the very ideas and creative copy you used to start your business. So whenever you find something unique about your business, you need to make sure that you’re protecting it. Intellectual property is just as precious as your real property, make no mistake.
The danger of prying eyes
Competitors and opportunistic thieves are always looking for ways to profit. Particularly off the vulnerabilities of business. They will particularly be looking at the times when a business is undergoing the most changes. Getting early knowledge of big matters can be disastrous. Matters like mergers, acquisitions and board communication. There are some internal communications you just need to make sure doesn’t get out. Leaked document drafts have led to the downfall of a lot of people. So you need to consider how things like a virtual data room can keep your business safe from prying eyes. They can do more than that, too. Data rooms can record any time some edits or accesses data. Which means that everyone involved in the process is kept a lot more accountable.
Safeguarding your data
Those private discussions and machinations of business aren’t the only thing you need to keep protected. All of your data is sacred. Whether it’s records of customer relations of the annual goals of the business. You don’t want anyone stealing your customers or ideas, after all. When it comes to financial details and customer information, that can get you in a lot more trouble. Both legally and financially. So you need to take every approach to data security that you can. Offer different levels of access to different employees. Encrypt any network access points. Make sure your staff is regularly trained in IT safety and password protection. You need to treat your servers like a vault.
Safeguarding your premises, too
We’ve looked at a lot these points of stealing ideas and spying on business. But we have to remember that there are some very physical threats lurking out there, too. If a business has even a few computers, that means it’s at risk from crime. Poorly secured workplaces can look like an easy payday for some of the crooks out there. Securing your business is about implementing multiple steps. CCTV records anyone who engages in suspicious activity. Securing any entrances and exits can act as a deterrent. Then a proper security system can sound the alarm. Networked systems alert you and the authorities when anyone enters the workplace without authorization. It’s easy to think that you’re not likely to be one of the many targeted by crime each and every year. That is until it happens to you.
Who’s got you covered?
Criminals can do a lot of damage to your business, physically. But so can all kinds of random factors. For example, you might want to cover your premises and contents from all kinds of damage caused by accidents or natural disasters. If you operate any vehicles, you’re going to need to make sure you’re covered for on-the-road accidents as well. Failing to protect your business with insurance will ensure you take a huge financial hit when something goes wrong. In the case of compensating for injuries and vehicle accidents, you could even be in legal trouble. Before you start operating, make sure that you’re as covered by insurance as you need to be.
The danger of money
Speaking of legal danger, one of the most common sources of that in a business is all down to the money. Keeping a closer eye on your money is a good idea to make sure you know how your finances are doing. But keeping accurate and detailed records are of vital interest to taxes and avoiding audits as well. Legally, you need to keep financial and tax records for up to six years. You also need to cover everything that sends money into and out of your business. So make sure you’re organizing things like payroll, invoices and expenses and keeping them in separate records. The same goes for records of any client contracts to prove where your business income is coming from.
It might not get you in legal trouble, but taking a few hits to your reputation can definitely put you in trouble of closing down. Nowadays, people are a lot more connected and conscientious as consumers. If they want to do business with a company they don’t know, you can bet that they’ll be looking online for reviews and testimonials. On average, more people will go on to write negative reviews than positive ones. However, you can change that by just asking for feedback from those customers who have a positive experience with you. Get a better reputation built around you by building your own community. Get online, ask questions and respond to feedback publicly. Above all else, however, avoid hitting out at negative criticism. This just brings a lot more attention to it.
Know when to get help
We’ve talked about a lot of issues that can result in legal trouble if they’re not handled properly. When it comes to law, it pays to err on the side of caution. Don’t imagine that reading up things online is enough to school you in the subtleties of the law. For instance, when creating employment or customer contracts, you might want to consult a lawyer. What you definitely do not want to do is copy another business’s contract. You are most likely not working with the same context as they are. Similarly, if you don’t know about accounting, get someone in to help you prepare for taxes and audits. Don’t leave it to chance.
There are risks around every corner in business. The chances are that you won’t encounter all of them, or even most of them. But not taking the necessary precautions to protect yourself from them is just inviting disaster. So don’t do that. Follow the tips above.