Starting a new company is incredibly exciting, but like any business, it comes with many risks. The uncomfortable truth is over 90% of business start-ups fail, but your potential failure isn’t completely determined by the market. To ensure you have the best chance at success, try and avoid the following 5 things that could threaten your start-up.
Identity Theft and Security Breaches
When you’re scaling your start-up, you’ll need a lot of money and resources. While doing so, you may make the mistake of trusting a website or individual too readily with your information, or you may fall victim to phishing scams. You can use software specializing in identity protection to manage such risks, but you also need to be proactive yourself by monitoring your banking information.
You also need to watch for security breaches, which could cost your company millions. Your customers need to know that their information is safe, so invest in top-notch digital security and data recovery system. Essential documents get erased all the time, so it’s important to have both so maintain the loyalty of your customers long-term.
Neglecting to Cross-Train
Many start-ups want to act like they’re already an established business. While this is great as a concept when implemented, it could spell disaster for your business. If you have too many specialized workers or job descriptions, you could end up paying 6 professionals instead of 3. Cross-training can significantly lower business costs.
There are many additional benefits to cross-training, including the added perspective of multiple different skill sets. Cross-training ensures that everything gets done on time, and there are fewer professionals who tell you that what they’re doing “wasn’t in their job description.” When responsibilities overlap, there is a higher degree of participation and accountability.
Growing too Quickly
Rapid expansion is usually a good thing because it means your business is succeeding. However, growing too quickly can actually destroy your business before you start to grow traction. While it’s tempting to search for investors, patten your idea and stock upon employees, you’ll find that this growth will steer you directly into bankruptcy.
Unless your business kicks off by going viral, you can mitigate this growth by marketing slowly. It’s common for a company not to have the servers for the traffic they’re receiving, which will lead to their website crashing and fewer viewers in the long-run. Focus on slowly gaining your resources, so ensure that the money you do get stays within the company.
The Team is Too Small
Everything in your business needs to operate on a fine-line and a balance. You need to scale with your company rather than pool all of your resources in the beginning. However, it’s still important to have a team working with you, or else you could experience burnout and neglect to grow your business in the future.
It’s rare to encounter the full-package talent necessary to achieve results, so bring in a team that brings in their own skills, talents, and perspectives to fill out what you can’t. You need a team that can recover quickly from a failed prototype onto the next big project, which could prove to be successful. More team members also help to avoid ego pitfalls and “Yes-Men.”
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