Keeping Your Suffering Company Afloat Until You Can Turn Things Around
Starting a company does not guarantee that it will be successful even if you as the founder personally did well in the industry in the past. In fact there are going to be times at every company where you think that things might be falling apart. This could mean losing a large client or being involved in some kind of lawsuit due to wrongful termination. Regardless of what happens the main focus should be overcoming the adversity in a positive way rather than being pessimistic and not taking the proactive approach. The following are different situations and how they should be faced at a startup.
The first problem that many companies dread is that of money problems whether they are long term or just a short term cash flow issue. Those who buy large quantities of products then resell them can be in this situation as all of their cash flow went into the products. This can make it quite difficult to pay employees so it is important to work out favorable payment terms. Half up front and half on delivery can be a great way to avoid the cash flow problems. For smaller companies personal loans might be the best option as it will have a low interest rate but you personally will be responsible for paying back rather than the company.
Employee Turnover is High
Companies lose money every time a person quits as a new person has to be hired to replace them. This does not guarantee in any way that this hire will be profitable or even great at their job. For this reason it is important to stress the teamwork environment and offer employees perks in lieu of a higher salary. You would be surprised what catering lunch once a week as well as having free coffee and snacks in the break room will do. Working from home is considered the holy grail of jobs for many of those people who want to travel. As long as productivity does not take a hit when offering these positions it can be a perk given to those performing at a certain level; Everyone should stay in the office for their first few months until they can be trusted with the responsibility of working from home. This will also give managers a chance to figure out which management style works best for this employee.
Former Employees Filing Lawsuits
There are thousands of wrongful termination lawsuits filed every day that have no basis. This does not mean that you should not hire appropriate legal counsel as you should fight this. Document every single thing and write up a person has had as well as get them to sign these things. Many people try to bring these lawsuits up as a way to get revenge on the company that fired them for just reasoning. Outsourcing HR is a good idea for this reason as a HR firm will be able to handle these claims quite easily as they document everything that they can. Outsourcing also gives HR the advantage of having a unbiased eye when there are issues in the office.
The above 3 situations can lead a company to go bankrupt quite quickly if they do not have much money in the bank. Take on these issues in a positive way and be proactive about preventing them if they have not yet occurred. Do not let your hard work be wasted by lack of planning or execution. Overcome tough situations and become a juggernaut in your industry!