5 Slip-Ups That Could Destroy Your Startup

Startups are an entrepreneur’s dream. You work for yourself. You develop a product and bring it to market. You hire competent, hard-working employees and create a workplace culture that reflects your values. Now, you're making money. Real money. Here's where many startups bite the dust. They improperly bankroll projects they can't afford yet. They don't build and enforce employee performance standards. They don't manage their workplace efficiency, or their finances.  To protect your growing startup from destruction, read about the most common slip-ups up-and-coming companies make.

Diminished Efficiency from Out-of-Date Practices

Startups, by nature, are evolving companies. You have a set of practices that made sense for your initial team of 10 employees. Now you have 30 employees. You might that the difference between 10 and 30 employees is no big deal. You're wrong. Your team of 10 people wore many hats, right? One person was the marketing contact, the media relations liaison, the social media expert, and the administrator. Now that you have 30 employees, those duties are divvied up between four people. Procedures need to change as your companies grow. If you don't make an active effort to reallocate duties, shift roles, and implement performance standards, you risk diminishing your company's efficiency and losing money rapidly.

Employee Mismanagement

As your company evolves, you have to hire more employees. You have to train and retrain your current employees. Unfortunately, you also have to thin the herd sometimes. Your growing startup will only thrive if it has a skilled team to meet your client's needs. Many startups make the mistake of over-hiring, then firing employees, or under-hiring, then overworking employees. It's critical to tightly manage the number of employees you have, and their performance.

Non-Compliance

Startups, to some extent, are about taking risks. However, senior managers are responsible for knowing which risks are legal and which risks potentially violate financial regulations. Though this may seem like an obvious and easily avoidable oversight, it’s not. Venture capitalists want to invest in successful startups. Other companies want to purchase or merge with them. It’s fairly easy (and common) to put the cart before the horse, begin negotiations, and violate your company’s regulatory obligations. This is why so many great startups, Facebook famously included, face lawsuits. In the case of a lawsuit, it may be wise to seek out an experienced attorney. More information can be found here on non-compliance lawsuits.

Unsafe Practices

While workplace safety is often the last thing on an entrepreneur’s mind, it’s a necessary part of every company. It demonstrates you care about your employees’ safety. It provides a protocol that everyone can abide. It protects your employees’ from accidents, violence, and human resource violations. Develop a workplace safety plan, protect your employees, and avoid getting sued in the meantime.

Ill-Advised or Delayed Marketing Strategies 

Believe it or not, your company is more readily identified by what people think of it than what you actually sell. A carefully crafted marketing strategy will help to develop your brand before the public develops it for you. It also can help you guide decisions, such as which brand to align with and which projects to fund. Public image is a precarious thing, and it’s critical to be in the driver’s seat.