The world of start-ups is said to be fast-paced, particularly for those involved in tech or rolling out innovative new products. Being there first can be important, but the rush to meet an arbitrary deadline can spell trouble further down the line. It can be compliance issues, disputes with partners or other problems.
Common mistakes that sink new ventures
Founders want to harness employee or investor enthusiasm, but some common strategic errors that come from rushing the process include:
- Assuming they would retain early adopters
- Misreading the market demand
- Ineffective marketing that does not reach the target audience
- Underestimating staffing or overestimating their effectiveness in doing the job
- Inability to scale up a business to meet demand
Legal issues should not be overlooked
Those building a new business often focus on the product, team and marketing. Ignoring compliance and even liability issues is a major risk. Even minor issues like non-compliance or failed inspections can cause delays. Founders need to consider the following:
- Basic things like no handrails on the steps, unmarked hazards or unsafe work conditions are problems.
- Premises liability insurance protects companies against injuries that lead to lawsuits.
- No accounting protocols in place to address ongoing administrative obligations distort the numbers.
- No operating agreements in writing can leave little recourse.
These or other issues can hobble a company just as it learns to walk.
Issues beyond your control
Others may wrongfully claim infringement, contract breeches, or initiate litigation. These matters may be beyond your control, but even baseless claims must be taken seriously or risk the lawsuit sidelining the business. Regardless of what you think you should be doing, addressing legal issues should be a primary concern.
Due diligence includes an attorney
Growing pains are unavoidable, but preparation and strategy can help identify potential pain points and enable businesses to have contingencies for foreseeable issues. A business law attorney with experience assisting owners in launching a business can be an indispensable asset, even providing real-time guidance to help clients remain agile in the ever-shifting marketplace.