3 Risks New Startups Should Be Aware of
No one starts a business without anticipating that mistakes are going to happen. Even when all the details of the business plan have been executed right, there can still be those unforeseen circumstances that bring a business to a screeching halt. The more you can prepare for those risks, the better off your startup will be able to handle them. Here are three risks every startup should be aware of.
The price you set in your budget for production costs is going to be constantly changing with conditions that you might not have thought anticipated. This source recommends you make an elastic budget that can bend when things don’t go as you planned, but won’t break. Have backups and contingency plans for when things don’t go the way you planned. You could be getting a particular item from an overseas supplier, but a hurricane delays or damages part of the shipment. That can result in delays while you’re waiting for replacement parts or paying double to get the items from another supplier. Bottom line: Try to build in contingencies to any production budget that would cover these kinds of risks.
Being Liable to Cybercrime
By some accounts, there are over 300 million pieces of malware viruses created each year. Many of these viruses are linked to cybercrimes. An infected computer can have its data taken hostage. This source discusses how cybercrime has become increasingly common and mainstream, and data is constantly under the risk of attack. Startups are at particular risk because not every startup has the kind of sophisticated firewall protection that a major corporation would have. That is why it is vital to make cybersecurity a priority. It is also why constant external backups of data are important.
Not Hiring the Right Staff
The success of a startup can be attributed to the staff who are carrying out your vision for the company. What started as a business with just a few employees can quickly grow into a staff of several dozen people or more. Each new hire is integral to the cohesion of your team. As the saying goes, it only takes one bad apple to spoil the whole bunch. That is why you want to make sure that you screen the right candidates for your company. This source brings up ideas for figuring out if the person you want to hire is the right person. You need to figure out their dedication, their ability to do things on their own, their ability to work with a diverse group of people and situations, their ability to learn and grow, and their responsiveness to bad situations or surprises. This process starts at the interview. Are you asking the right questions to find the perfect staff?
Some risks will be worth taking for your startup, such as investing in marketing or expansion. Other risks can be mitigated by being informed and having a backup plan. Don’t let your startup falter because you didn’t think things through.
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