Businesses always want to stay open and profitable. Some may want to expand and add revenue sources, but the bottom line for the typical business entity is to remain open and functional, with products or services going out and money coming in.
There are always going to be potential impediments to that happening, though. Any company, regardless of its business model, will have both internal and external threats that can derail its success.
In this article, we’ll look at a few of the most significant business dangers. We’ll also talk about how to avoid them.
Lawsuits are undeniably one of the biggest potential business dangers. Regardless of what your business produces or what services you offer, if you leave yourself open to a lawsuit and you lose in court, that can bankrupt you if you must pay a big cash settlement.
Say, for instance, that you run a dental office. If so, medical malpractice would be the biggest lawsuit risk. The National Practitioner Data Bank states that in a recent decade, there were 19,755 practicing US dentists. There were, during that period, 16,337 medical malpractice payments.
Those dentists who had to pay out for medical malpractice suits likely did so because a jury determined they did not meet the patient care standard. That’s how medical malpractice works, but even if you have a completely different business model, you still leave yourself open to potential lawsuits. There are always product liability lawsuits, premises liability lawsuits, and so forth.
The best thing to do as a business operator or owner if you want to avoid devastating lawsuits is to get as much insurance as you possibly can and also to follow all the laws and rules pertaining to your niche. Know how you’re supposed to conduct yourself and your operations, and you have the best chance of staying in business.
2. Employee Incompetence
At all times, you want to hire the best available employees for all of your company’s positions. That’s part of how you get ahead of the competition. If you have a highly qualified staff dedicated to their jobs and the company’s overall success, you have an excellent chance of thriving.
On the other hand, if you hire individuals who you think will work well in various positions, but then it turns out they misrepresented their qualifications, that can often become problematic. Your employees might grow into their jobs, but what’s more likely is that you’ll start to see them make critical errors.
If you determine after hiring someone that they can’t do the work you thought they could, you can always fire them for cause. By that point, though, their actions might have hurt your company quite a bit. Your employees represent you, and if some of them demonstrate incompetence and your customers or clients see that, your reputation will take a hit.
The way around that is to do your due diligence regarding every candidate before you hire them. You can’t always be sure every new hire will work out. If you look into each candidate’s background extensively, though, and check all their references, it’s more likely you’ll hire people who will work out and represent the company well.
3. Your Competitors
There are very few niches or industries where you start a business, and there’s no competition at all. There’s competition practically everywhere and for virtually everything. If a company opens and dominates a market because there are no competitors at first, it’s likely that some will show up when other people realize an untapped market exists.
There’s nothing wrong with competition, in theory. It can help you because it drives you to produce the best product or provide the best service. That’s how you retain employees and customers.
You run into problems when the competition is doing what you do, but better. The money will always go to the business entity that provides the best service or product at the lowest possible price, along with the best customer service and the most additional benefits.
If you’re keeping up with the competition, that’s great. If they’re doing better than you, they might put you out of business if you can’t figure out how to keep pace and overtake them.
The answer is to be excellent at what you do. Figure out how to be better than other comparable business entities, and you should be able to remain open and profitable.
4. Unexpected Problems
Unexpected issues can derail businesses too. Think about the pandemic’s arrival last year. It shuttered many companies, some of them permanently, because these entities couldn’t figure out how to adjust their business model.
Hardly anyone could have predicted something like the pandemic. It happened suddenly, and it wrecked many different industries while causing others to restructure completely.
However, it’s the perfect example of the unexpected occurring. That always happens in business. It might not always be a pandemic, but it might be automation, a natural disaster, or just about anything else.
It’s hard to prepare your business for the unexpected because you never know what form it’s going to take. Of the many things that could have happened in the past year, a global pandemic was so devastating because it was so unexpected.
You have to try to envision many different possibilities for your business. Think of likely obstacles or issues you might encounter, but also consider more unlikely scenarios.
Have several different fallback positions and alternate business plans in place at all times. Think about what you’d do if various events occurred.
It’s probably impossible to think of literally everything that could take place. Still, if you have alternate strategies that you’re ready to break out at a moment’s notice, you have a better chance of your business surviving than if an event catches you with no contingency plans.
These are just four of the possible business threats that exist, but they are some of the biggest ones, so be ready for them in the ways that we described.