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Disasters happen, it’s the natural course of the world. An earthquake can strike unexpectedly, a car can collide with ours, or a fire can destroy our homes. Most of these disasters are unexpected, unpredictable, and random and therefore cannot be avoided. When they happen it is tragic, but at some point you have to accept the fact that they happened and move on.
There are disasters in the business world with similar characteristics: they strike at random, unexpectedly, and can dismantle a business before they even know what’s going on. But most business disasters are the opposite – they are predictable and completely avoidable, but they have still ruined countless startups with otherwise promising potential.
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Allowing your business to succumb to one of these entirely avoidable fates will make you regret. Don’t let these preventable disasters happen to you:
1. Steal your intellectual property
Suppose you have a product that no one else is producing and you desperately want to market it. You could abandon the traditional branding process in favor of establishing the foundations of your production capacity. Or maybe you have a signing process that you use in your main service, which you end up disclosing to a potential partner without a nondisclosure agreement – because what could be worse? A competitor can steal the design of your product. Your partner can sell your unique process to another interested company. And you could end up with nothing that makes your business unique.
It’s easy to get excited about your business and rush into the early stages of all operations, but you have to protect yourself. Do your research in advance, register your company name, mark your products whenever you can and protect your intellectual property with NDAs.
2. Use of someone else’s intellectual property
There is of course a downside to this. If you use another person’s intellectual property without their consent, you may be subject to prosecution. If the lawsuit doesn’t immediately bankrupt your business, the long lawsuit and bad publicity could be enough to bury your business before you even have a chance to start.
Of course, most cases of misuse of intellectual property are unintentional. You may have chosen a name for your business that has already been taken, or you may have used an image that you thought was free to use. Before using anything for profit, be sure to do your research beforehand. It could save your business.
3. Lack of capital
If your business is not profitable or if your idea is not as marketable as it looked on paper, it is one thing, but the lack of capital is a completely preventable disaster. Your working capital is the blood that drives your business. If it dries, you won’t be able to pay your bills, or your employees for that matter. It is entirely possible to have a functional and profitable business while being short of capital because you were not prepared.
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To avoid this, protect your cash carefully. Establish firm payment terms, do background checks on your customers, and use best practices to make sure your cash flow stays positive. Then, if you feel like you are close to a danger, get more financing or a line of credit to help you close that gap.
4. Getting overtaken
Most cases of an upgraded business are completely avoidable. Either an existing business turns out to be too daunting to take over, your business idea was not unique enough to stand on its own, or a new competitor appeared to compete with you in a new way. All of these scenarios can be avoided by doing more research, responding faster, or combining the two.
Always keep an eye on your competitors and respond accordingly as quickly as possible.
5. Losing your main team
Your team is what drives your business and, at the start of your start-up, you might only have a few employees. If they all leave, you may be forced to close the store permanently.
There are several ways to avoid this disaster. First, be more careful in your hiring process to eliminate volatile workers. Second, implement morale boosters to keep your employees happy. Finally, configure a certain level of redundancy, a backup plan, to start if one of your team members decides to leave.
Take action now to make sure none of these disasters hit your business. With a handful of simple preparatory measures, you can equip yourself not only to deal with these impending calamities, but also to mitigate their effects if they ever come close to the demonstration. You can never prepare for everything, but the more you can prepare, the better your chances for long-term success.
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