What Are Your Startup Risks and How Do You Handle Them?

Most startups die on the vine, crashing and burning early on before they have much of a chance to get going. Why is that? It’s because there are so many risks attached to fledgling businesses. Do you know what those risks are and are you prepared to deal with them as they come?

We have put together a short guide here to help you navigate the risks of a new business, and we hope this helps prepare you for what you are getting into as a new business owner.

A Changing Market

Many businesses are begun on the promise of a receptive and vibrant market. The business gets off to a running start because there is a market for the product or service that is being offered, but then something happens and the market for that business idea suddenly disappears. The market is always changing, as are consumer tastes. What was trendy five years ago is likely not still trendy. If your business is riding a trend, that trend will change in time. You either adapt or you die, and it’s really that simple.

Look at market trends to position your business strategically, but also look out for changing trends and prepare your business to adapt to meet those. If you are unable to keep up with the trends or attach yourself to a target audience that wants what you have to offer, then your business will go belly up.

Capital Runs Out

It would be best if you had the capital to start up a business and to cover expenses like rent, employee pay, stock for your business, and more. The initial costs will be high, and if you can cover those, then your business may manage to cruise by for a while. However, sales can be slow starting out, and your capital may run out. If you don’t have a way to get more capital, then you will likely have to give up the business.

The solution is to have a revenue stream that you can be sure of and to draw off that. Otherwise, you need to have a way to borrow money temporarily to help get through a rough patch. You cannot predict accurately how your business will perform over the next few months or years. You need to have contingency plans set up to deal with any major loss or lack of funds. If you can do that, then your business will have a safety net to fall into.

Emergencies

You never know what will happen to your business. Things could be running along smoothly and then suddenly a flood will come along and wipe everything out. It will have nothing to do with gaining sales and keeping customers. These kinds of freak accidents happen, and you need to have a plan in place to deal with them.

You can either stress out and feel frustrated by emergencies or you can deal with them smartly and strategically. If you need cleanup after a disaster of some kind, then use emergency same day cleaning in NYC. If you need immediate repairs done, have a 24-hour handyman ready to go so that the repairs can be completed before the store is supposed to open. You need to be able to get back on your feet fast as a business, otherwise, you will suffer long-term consequences that will be very difficult to overcome.

Slow Growth

To pay back your investors or your loans, you will need to get your business growing and gaining new customers. If that doesn’t happen, then you will see your debt pile up while your profits disappear. Your business needs growth to thrive, or else it could die. If growth happens too slowly, then you will be placed in a tight spot. How do you get out of that?

It will help to have a growth plan to work from. If you have one that is designed for your type of business, then you can stick to that and will likely see growth happen. As you see your growth slow, you can do things like advertise more and offer sales to bring in more customers.

You may have to take some risks to see growth happen, such as expanding into new areas, adding new products or services, and targeting a new demographic of customers with your advertising. If those risks pay off, you can see growth happen very quickly.

Economic Slowdown

What do you do in a recession? You can’t control whether the market drops off or not. You have no say as to whether inflation affects your customers’ spending habits or if higher taxes make everyone scrimp and save money. When there is an economic downturn, you have to roll with the punches and adapt your business model. You may have to cut expenses or reposition your business for the changing market. You might have to find cheaper products to sell or offer your services at a discount. In this unstable economy, an economic slowdown could happen at any time, and if you are not prepared, it will catch you unaware and sink your business quickly. Be positive, of course, but be prepared for the worst as well.

Employee Burnout

If you work your employees hard, you may be able to get a lot of productivity out of them, but that can only last so long. If you go into crunch time and require them to work overtime, you may see incredible results in a short amount of time, but then you will put them at risk for burnout. You don’t want that.

It may happen, though, especially during busy periods like the holiday season. What do you do when your employees burn out and start producing less and working less effectively? You need to give them a break, and you can do that smartly by allowing them to take breaks from work at different times. You can allow for at-home work when possible and offer other options to keep the burnout from affecting their work output too much.