Halloween has become a national obsession, with all things spooky, creepy, and ominous. Perhaps it would be a good exercise at this time of the year to consider what scares you the most so you can prepare accordingly to the greatest extent possible.
Here’s a list of 10 terrible things that can so easily happen to just about any business:
1. A natural disaster
It can temporarily, or even permanently, put you out of business. (I was shuttered for nearly a week last year because of Hurricane Irma.) And even if such event doesn’t happen to you, it can befall your vendors, disrupting your supply chain. Do you have a disaster recovery plan? Do you have adequate insurance to weather the storm (pun intended)?
2. A recession
The economy continually cycles, but there are periods (remember 2008 through 2011?) when things look very dark. Are you prepared to get through a down cycle? Do you have a financial backstop to help you with this?
3. A lawsuit
These are all too common for small businesses. If you are sued, immediately notify your insurer and determine whether to use the insurance company’s attorney as your representation or to find your own attorney. If you experience a problem, determine whether to bring a lawsuit (do a cost/benefit analysis). And, of course, try to prevent lawsuits by using contracts, complying with the law, and working for reconciliation when potential problems emerge so they don’t ripen into lawsuits.
4. Losing key employees
In today’s tight job market, employees are jumping ship for better wages, bigger benefits, and greater opportunity. It’s challenging for small companies to compete in the workplace with multinationals. Make sure you continually review your compensation packages. Learn from employees what they want most; it may be flexible hours that don’t cost you a penny more.
5. Unfair competition
Your biggest competitor may engage in deceptive or wrongful business practices that cause economic injury to your company. These practices may include trademark infringement, business defamation, or misappropriation (stealing) your trade secrets. These things happen, for example, when an employee of yours becomes your competitor’s employee, along with your price list and other information the knowledge of which can harm you. Be sure employees sign nondisclosure agreements to protect trade secrets, and be vigilant to spot quickly any unfair competition so you can take action immediately to stem the damage.
Even at a small company, scandals can happen. I was shocked to learn in my local paper that the owner of a business I dealt with for years was arrested for child pornography. OK, this probably won’t happen to you, but your company can experience bad publicity; social media is quick to reveal a rude employee or a bad customer experience. Be ready to respond to scandal with an appropriate response (e.g., changing company policy, using public relations).
7. New laws and regulations
A commercial fisherman I know was knocked for a loop when the number of fish he was permitted to catch was slashed dramatically. A change in a federal, state, or local rule can knock you for a loop. Be vigilant about new rules; you may want to express concerns before they’re adopted, or if adopted, learn how they impact you and what you can do about them.
8. Your disability or death
What happens to your business when something happens to you? Do you have people to run your business if you’re incapacitated? Do you have a succession plan in place?
9. The unknown
Donald Rumsfeld said “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. These are things we don’t know we don’t know.” This can be scary. You probably can learn what you know you don’t know, but it’s hard to learn something you don’t know you don’t know. The best course of action is for a business owner to surround him/herself with a team of experts in many fields (law, accounting, IT, marketing).
Perhaps the greatest fear of small business owners is that they won’t succeed. A Paychex survey found that 82% of would-be small business owners had this fear. I've written about this very thing in my book, Smooth Failing (a revised paperback edition will be available soon).