What to Do When Your Startup is in Crisis?

When you think about running a small business, you might think of the satisfaction of how you will build something from scratch, the challenges of managing employees, or the pride of passing the company on to your children someday.

While the effects of a pandemic have made business owners far more conscious of how quickly a crisis can overtake even the best-laid plans, many entrepreneurs still do not think in terms of crisis planning when they are getting a new venture underway. The tips below can help you better prepare your startup for this possibility.

Prepare a Crisis Plan

You can’t anticipate everything that will happen, but you can put some information and procedures in place that you and others can refer to easily if a serious problem does arise.

These might include the death of a key person in the company, a natural disaster, an identity theft scheme, sudden reputational damage, or any other event that seriously threatens the ability of your business to survive.

You need to have a plan that includes important contact information, what procedures employees should follow, and what everyone’s responsibilities will be. This plan should be reviewed and updated regularly.

Identify Funding Sources

If all goes well, once your business is running, you won’t need to bring in funding from outside. Unfortunately, life is not always this smooth and predictable, so it’s a good idea to identify where you might be able to get money if you need it.

This could mean making sure that you have good credit and a good relationship with a local bank that you would be able to get a business loan from if necessary. It could also mean knowing which of your personal assets you could liquidate quickly if you had to.

For example, some types of life insurance policies have a cash value. You could review a guide on how to choose among life insurance settlement companies. You might have other investments that you could sell as well.

Make a Social Media Policy

These days, many businesses are as likely to face a crisis in the online world as anywhere else. While it may not be possible to avoid the possibility of one entirely, having clear social media policies in place can help reduce the likelihood and can make navigating through one easier if a problem does arise.

You may want to have a general policy that your employees are not supposed to discuss the workplace on social media. You should also be careful about how your brand is perceived. Adhering to strict guidelines in how your social media accounts interact with the general public can prevent many problems before they start.

Be Transparent

When a crisis arises, it’s understandable if your first urge is to try to batten the hatches and steer through it on your own. However, you’re much better off if you are able to be transparent with both your employees and your customers. Even if you have to make decisions that will negatively impact them, they will respect your integrity more if you make an effort to be as open with them as you can be.

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