When you decide to open a business, there’s going to be quite a few risks you’re going to have to be ready for, and you never know when they could set you back some. New businesses with young owners don’t usually have as many safety nets in place in the event that setbacks happen, so you sometimes have to take extra steps to remedy setbacks if you’re in that category. But knowing what you’re up against can help you be better prepared.
Lack Of Correct Business Model
Sometimes newer business owners have the right business but don’t have the right model of operation. Businesses have to show they can adapt and diversify products and the way they do business in order to keep revenue flowing. Also, they need to have a structure where delegation can keep things moving for when either you or another executive are out on vacation.
Losing Big Clients
While business owners usually strive to keep relationships with clients in good health, sometimes clients simply want another company to partner with. When that happens, be prepared to get your sales and marketing team ready to find new partners or big customers to do business with. While you will have to tighten your belt a little if this happens, it is possible to get through periods like this.
Shortage Of Cash Flow
Sometimes you find yourself needing a little capital or cash to work with and perhaps you weren’t able to win the venture capital investor over that you wanted, or your customers are slowly paying in accounts receivable. This is very common for new businesses that have potential but haven’t seen revenue explode in growth yet. Sometimes it’s helpful to look at various SBA loans if your business qualifies, or if you’re a larger business you can look at a merchant cash advance or invoice factor financing. Ultimately, Money Crashers says that “Speeding up the flow – converting sales into cash as soon as possible – and increasing the spread between inflows and outflows to build a cash cushion are essential to the long-term, sustained growth of every company, large or small.”
Failed Products Or Services
Nearly every business large and small has put out hyped products that customers just didn’t like and that ended up costing them. The best remedy for this is not to get caught up in any one product you sell and to do a little research to see if it’s what customers want. Even if you lose on one product, make up for that one with other better products you have or services customers love.
Property Damage And Lawsuits
One of the biggest storms that’s a nightmare for business startups are damages to their premises by various natural disasters, or dealing with accidents that have happened to customers or employees. The main way to keep your business from dealing with the fallout from these incidents is to make sure your insurance policies are in place and can sufficiently protect you. Never assume your business is off the hook even if the property is rented. You need to minimize potential damage from a lawsuit by regularly inspecting your property and taking preventative steps as needed. While it can be difficult to prove fault in a personal injury case, the bigger your business becomes, the bigger target you become.
Financial storms can be difficult to overcome but not impossible. It’s a good investment to have a lawyer consulted who specializes in business laws and have the funds ready to hire them if worse comes to worse. But ultimately, you need to have a budgeting plan and diverse investment strategy to get through most setbacks.
Did you find this useful and interesting? If so, check out some of our other related articles and subscribe to our podcast: