Startup life can be extremely stressful as every deadline could make or break a business. This stress can be worth it especially if a company makes it big and an employee was at the ground level. The corporate life at an established company is going to be much more stable but work done by an employee might not impact the company at all. Issues are plentiful in startups with some being due to growing at a faster rate than expected as well as first time founders trying to set the business up for success. The following are crippling issues that startups can face as well as how to deal with them.
High Employee Turnover Rate
Training employees to be profitable is a large investment for companies as it can take thousands of dollars in time and money to do so. For this reason a high employee turnover rate can cripple cash flow. To solve this you are going to have to sure up hiring practices as you are choosing the wrong type of candidate. Those people who frequently switch jobs are going to try to find something better as this is what they have done in the past. A good HR company can help you with this as they staff hundreds of companies successfully per year.
Breach of Contract
Breach of contract happens more than many people might think with startups. Companies think that they can take advantage of a startup or individual simply because they are not a huge corporation. Things like lawsuit loans can help immensely as they can help fund a business while lawyers work out the issue. Do not allow any company to walk all over you as it can set the tone for the rest of the business relationship. Also avoid this situation by having a legal professional draw up contracts so the language protects the startup.
Employees Flocking To Competitors
If you see that many of your previous employees are flocking to work at a competitor it is time to solve this. Although NDA agreements prohibit people from talking about their old job, this does not happen in all cases. You need to have employees sign a non-compete so you do not have any type of corporate ship jumping. The NDA can be on a position by position basis as losing a salesperson can also lose clients. The IT guy usually is not going to take any business with him so he probably wouldn’t have to sign anything but an NDA.
Large Client Terminating Their Contract
Many startups can go out of business if one or two of their large clients terminate a contract or decide not to renew with the startup. For this reason it is important to always be pitching new potential customers. This will help diversify your clients and therefore mitigate the financial impact of a large client leaving. A healthy sales pipeline will allow a company to do this. This will also allow a company to drop a client if they have become too demanding or simply are a problem regardless of the quality of work they receive.