Braving the world of business as the head of the operation means reaping the lion’s share of glory for successes; however, it also means taking the blame for when things go wrong.
This can make managing an incredibly high-pressure undertaking. Fortunately, there is a wealth of resources that you can use to your advantage to avoid disasters, as well as recover from the ones that are inevitable.
Encountering adversity to some degree is inevitable.
Therefore, you’re doing your future self an enormous favor by brushing up on mistakes of the past and building your knowledge base on how to handle them.
The Cambridge-Analytica scandal led to a precipitous drop in stock prices, proving that even large companies like Facebook are vulnerable to such threats.
This also aligns with research that shows data breaches are only becoming increasingly more common. This means the security of your data is more important than ever.
To raise your business’ defense against the new age of threats, it is recommended that you invest in software that features ransomware detection. This will give you an up-to-date countermeasure to some of the most common threats that exist today.
Keeping your software up to date can easily fall by the wayside, especially if these updates are not installed automatically.
Constant notifications prompting an update can seem like mere tedious annoyances, but rest assured these updates exist for good reason. Often, they include security to combat the latest cyber threats.
Allowing Marketing To Fall Into Disrepair
The trap that many smaller businesses fall into is lowering the priority of marketing once a client or two have been acquired.
This is a mistake since you need a constant flow of clients if you want your business to have any degree of stability. Always keep your marketing efforts sharpened and up to date.
Social media is one way that you can market with a high degree of flexibility and at low cost. This represents one of the greatest growth opportunities for businesses since it puts your brand in front of the eyes of an endless supply of people.
All of these tiers of your marketing system feed into each other and create a whole that is greater than the sum of its parts.
Risks Of Customer Concentration
You need to prevent one customer from becoming too great of a percentage of your total revenue. It is generally advised that you keep the revenue generated from any one customer under 10%.
This will prevent you from becoming too dependent and unstable. It can be tempting to cater to one well-paying client but if this comes at the cost of neglect for the others, some readjustment is in order.
Always stay vigilant about alternative sources of revenue separate from your “cash cow”. Hypothesize as to what may happen if this lucrative relationship comes to an end because even the strongest relationships can come to an untimely halt if the circumstances align.
Excessive Optimism In Projections
While some optimism is good, it’s also important to stay anchored in reality. You may have grandiose visions for the future, but take it in stride and don’t go overboard with spending.
Instead, set conservative projections and work your way up slowly. Always under-promise and over-deliver, because the opposite will likely lead to your demise.
Being an entrepreneur is in many senses a “learn-as-you-go” endeavor, especially for the less experienced. But this is no excuse for inadequate planning.
There is a myriad of free resources available online that aspiring entrepreneurs of previous generations would kill for. Put time and effort into etching out a concise business plan and schedule for benchmarks, and you will reap the rewards of your diligence.
It can be intimidating to create a business from nothing, but the momentum can pick up quickly after the initial challenge of getting everything in motion.
Establish order in your business, and make sure that you keep all areas of the enterprise in fighting shape. This means staying vigorous with your marketing even when things are going well. Your plan is to ensure your company’s longevity by decisions in the interim.
You also need to make sure that customers are the primary source of income powering the business. If the money used to maintain your operations is mostly coming from other non-customer sources like investors, you need to keep in mind that this will run out.
Intellectual Property Lawsuits
This an oft unforeseen setback, and usually occurs when someone working for your business doesn’t realize that what they are doing is wrong.
Something as simple as using an image without permission, or mentioning another company’s name disparagingly in an advertisement can translate to a very expensive legal matter.
For this reason, it’s best to have a good idea of intellectual property laws going in.