Disruptions in cash flow, fluctuations in consumer interest, rising competition and financial complications are things that can affect any business. But since startups are more vulnerable than well-established businesses, they are more likely to fail.
Despite the fact that so many startups begin on such a promising note, many of them are unable to continue their good streak and eventually go under.
While it is true that one must always be optimistic and beat the odds, it is also important to anticipate the worst and come up with ways to deal with troublesome situations.
Following are some ways in which startups can prepare themselves for a disaster:
Read the news
You can prepare for any number of potential disasters if you read the news. By being updated with what goes on in the business world you will be in a better position to read the signs of an economic downturn that may claim several small to medium-sized businesses.
You will be in the loop about business trends such as business owners curbing their marketing expenditures as a consequence of slowing economy. You may get to learn about new competitors and other such turning points that will demand strategy revisions from your end.
Those who read frequently will be acquainted with the new technologies that are yet to enter the market and also be able to predict if it will spell doom for them or make things easier.
Plan B for everything
You will need a plan B to back up any plan A that fails. If you do not have a plan B in place you may feel stuck and a disaster will likely be on the cards.
Irrespective of the nature of your aspiration, there should always be a companion plan in place for everything that you do or plan to do.
You can also put in place a contingency plan and include it in your business plan if you are anxious about your launch plan not living up to your expectations or your actual sales figures not meeting the ones you had in mind.
Your estimates shouldn’t be aligned exactly with what you expect to see but it should reflect a watered down version of what you expect to see. If you are genuinely expecting to see a sales figure somewhere between £100000 in your first year of operations you should write it down as £50000.
If according to your estimates you should be ready to launch the product within the next 10 weeks you should prepare your investors for the product launch for a date that is 12 weeks from now.
If you think that a particular task will take up an hour of your time, schedule an hour and a half for the same. You will save yourself from a lot of headaches by adopting a conservative approach to estimating.
Establish redundancy in processes
A painful process in any startup is to formally document all procedures and policies. But if you want your operations to run smoothly you may have to take on these painful processes with a smile on your face, irrespective of what your true feelings are towards it.
If your startup can only afford one person in each department, you may become handicapped if the person handling a particular operation decides to quit unexpectedly or gets sick for a week. In such a situation who would step in and handle the operations?
Realize that you’ll be blindsided
The best strategy to prepare for a disaster is not to come up with a foolproof plan that covers every aspect of what could go wrong and what can be done to counter it.
The startup must be prepared for the possibility that someday something may come along that leaves you dumbstruck. Preparing yourself for the possibility that in the face of some unknown difficulty your estimations, insights, redundancies, and contingencies may fall through, is crucial to come up with effective disaster management practices.
By putting in place the above strategies you should be able to mitigate or prevent most of the disasters that may strike your business. Besides the above measures, you should also look for ways to secure your wealth by learning more about how to make a Will.