Tommy Wyher — July 16, 2018 The startup world is quite competitive with all companies vying for top talent in their industries. Finding the right staff can be enough to establish a profitable company for years to come. The truth is that one major mistake or problem can put a startup out of business especially if it does not have a multitude of funding. The key to startup success is to avoid disasters and meet challenges with a proactive approach to solving them. The ability to adapt in the startup world is essential as business changes quickly in some industries. Risk management needs to be practiced to the best of the startups ability as at times everything that can go wrong will go wrong. The following are ways risks can be mitigated that can put a startup out of business.
Diversify Clientele
Most startups only have a few clients and one of which could be responsible for the majority of the revenue the company brings in. The most important thing to do besides keep this client happy is look for a way to diversify revenue streams. Finding a few large clients will help lessen the financial blow if a client does not sign another contract or does not need any work done for a few months. Getting referrals from current clients is an option but offer them a form of a discount for doing so. This also gives the staff a vote of confidence that the company is satisfied with the work being done for them. Once the business has an array of clients it can be time to start having to turn clients down or start picking the easiest to work with. No startup wants to turn business away so making processes that are scalable can help alleviate growing pains of taking on a multitude of business.
Let An HR Firm Handle Problems In The Office
One of the worst things that can happen to a startup is a former employee suing due to wrongful termination. This can end up costing a company quite a bit of money if the proper procedures were not followed. A HR company eliminates the need to handle these issues in-house and know the appropriate procedures of how to reprimand someone. The issue that might be encountered is if the HR company thinks firing someone due to certain infractions is the best idea even though they are a very productive employee. Outsourcing HR can help mitigate any risk of lawsuit due to wrongful termination or discrimination of any kind. This type of
Employee Retention
Employee retention can be a difficult part of a startup as the environment can be extremely stressful. In a startup every deadline can be the difference between being able to make payroll or even pay office rent. This can be too much for some people to handle but others enjoy seeing how their work impacts the business as a whole. Perks are a perfect way to reduce employee turnover as the ultimate perk is that of working from home. This actually can save company money as well due to the need for less office space. The freedom that working from home allows the employee can be enough to keep them on long-term. Many younger employees that work from home live across the world as they can work anywhere with a reliable internet connection.
Customer or Employee Information Leak
Startups cannot usually endure a breach of customer trust by having information leak. Many consumers and businesses are weary to work with smaller businesses in the first place; a data leak or hack can turn them to pick a larger competitor at a more established company. Not all leaks are due to poor web security or a piece of stolen technology. Disgruntled employees can wreak havoc on a company if they feel like they haven’t been given a promotion or a former employee not agreeing on the reasoning they were let go. Keeping passwords for platforms used by the company on a need to know basis is important. Changing these passwords once a person is terminated is important as well. You need to lock their company email as well to avoid them trying to ruin any customer relationships.
Social Media Disasters Can Blow Up
The social media team for a startup need to be careful as saying the wrong thing can ruin brand image. Even if the team does not deem a certain statement offensive, others might so it is better to be cautious. For this reason, company social media accounts should only be accessed at work and posts scheduled out for the month. Answering customer questions, complaints, and engaging with followers can be done during work hours. Under no circumstances should the person with social media access be logged in at all if they have consumed alcohol. A drunken rant can spell disaster with clients heading for the hills especially newer clients that have not done much work with the startup.
The above things can hurt a startup to the point where they might not be able to recover. Be proactive with processes and policies that help reduce the risks of things that can hurt the business well into the future.
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