While the abundance of tools and resources available online mean that this generation is arguably the best time in history to launch a new company, many startups are still sinking within their first few years of operation. Regardless of which industry you operate in, there are going to be expenses and risks that contribute toward the possibility of going under. Some business models carry fewer risks than others, but any time you go into business you’re taking on the fundamental risk that things might not go as planned. With that said, here’s a short but powerful list of four steps every company can take to ensure continuity and avoid closing down prematurely.
1. Study Safety and Redundancy
Occupational safety and operational redundancy are two factors that can cause serious financial, legal, and informational issues in the event of a mishap. Startup founders should immerse themselves in the research process and maybe even attend educational events like SeminarFest before officially launching any kind of business. Doing the research beforehand will ensure that you’re not surprised and overwhelmed by problems during the early stages of company operation. Of course, if your company is already doing business, it’s not too late to go back to the drawing board and make precautionary revisions.
2. Diversify Revenue Sources
Diversification is a classic concept that’s often pushed by successful entrepreneurs, and for good reason – it helps to have your eggs in many different baskets. Even within the confines of a single niche or industry, you can still diversify by obtaining more clients and pursuing more projects. You can also diversify your marketing efforts by targeting additional keywords, intersecting topics, and new demographics. Taking a multi-faceted approach will prevent your company from losing big when one source of revenue starts to dwindle or dry up.
3. Practice Stringent Hiring Techniques
Unless you’re running a one-person show, the success of your company is going to depend entirely on the skills and effort contributed by your employees. Thus, it’s imperative to create a strong foundation in the beginning by building the business around a staff of competent, experienced, credentialed, and collaborative individuals. Take time to screen plenty of candidates and consider offering appealing salaries and incentives to attract premium talent.
4. Use Performance Monitoring and Analytics
It’s possible to hire an all-star staff and still face operational deficiencies and suboptimal results. People don’t always live up to their track record, so it’s important to monitor or review employee performance and correspondence to ensure that everyone is carrying out their job duties in the most effective and efficient manner.
Taking Steps to Reduce the Probability of Failure
Ultimately, all of the tips suggested above should be thought of as core components to a much larger risk mitigation and prevention plan. Start by identifying the biggest risks your company faces, and then implement strategies to proactively address those potential issues. By operating with the “anything that can go wrong, will go wrong” mindset, you can create backup plans that account for almost every possible cause of company downfall.
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