Running and managing a business, regardless of its size, is challenging. That’s why only 50% of new businesses and start-ups can reach a successful 5-year milestone. However, small businesses have to deal with issues more often and can escalate if they are not taken care of at the right time.
Specifically, legal and logical mistakes can easily ruin your hard work, and so is your business. There are several ways to ruin a business. If you don’t watch out for them, they can exploit your business too. The internal mistakes of a company can destroy its reputation, affect turnover, and much more.
On the other hand, people are there who are looking for how to destroy a company from the outside. Hence, you must stay alert and avoid certain flaws that can devastate your business empire. Let’s check out the common mistakes that can legally wreck your business.
What Can Legally Destroy Your Business?
A brand’s reputation and overall turnover are 2 prime pillars of a business’s success. Outsiders might be waiting for how to destroy a business on social media and affect its reputation. As a business owner, you must not make a mistake that will help outsiders accomplish what they want.
Several errors can hurt your business legally and force you to shut it down. Here are some commonly noted mistakes that can legally destroy your business and you should be aware of:
Absence of Solid Organisational Structure and Documents
Starting a business sounds easy, but it’s not. The first and foremost job of starting a business is to decide the right ownership structure. This decision will help you accept investors, if you can sell the company, what your tax liability and benefits are, etc.
Selecting the wrong ownership structure can be misleading. As a result, you may expose yourself to unlimited potential liability for the business’s debt. So, take your time and consult with a business lawyer to decide ownership. For example, you can select from a sole proprietorship, partnership, limited liability company, or corporation.
You must possess the proper documentation besides declaring your company’s ownership. Otherwise, you might risk losing your business as courts conclude that your corporation is improperly maintained or established. Additionally, you can lose credibility, and investors can become indifferent to your business.
Hence, these 2 tasks are a must for a business owner. Or else, the lack of selecting the right ownership and its proper documentation can ruin your business legally.
Data Leaks from Business
According to a study conducted by the Ponemon Institute, 65% of companies barely care about policies for managing passwords. Consequently, employees use the same weak password for different devices, applications, and uses. Thus, outsiders or cyber-attackers can obtain passwords from a single source and unlock data from diverse devices.
The reality is that passwords can get compromised regardless of their complexity. Hackers can match passwords against a list of known and tried passwords and login credentials. So, your employees can give out data knowingly or unknowingly if you don’t have a strict policy about passwords and other login credentials.
How can you prevent data leaks? First, identify the most significant data for your business and elevate its protection level. It’s best to utilise data loss prevention software. Additionally, roll out a password protection and management plan at a small scale for your employees to test your company’s overall security.
Besides this, you should pay special attention to your business network. Reportedly, hackers spy on a business network for 6 months before sneaking into the system. Hence, use Data Activity Monitoring software to track all resources in the network. Furthermore, you can identify threats that can find ways to ruin a business.
Moreover, invest in a good encryption system that can prevent many sophisticated attacks. If your company has a ‘bring your own device’ policy, then securing all endpoints is mandatory. Ask employees to install network firewalls, secure gateways, and intrusion detection and prevention systems in their devices. Otherwise, data leaks can destroy your company’s reputation.
Weak Employment Agreements
This is one of the most basic ways to ruin a business. Most small businesses and start-ups need to correct this. They need to generate the right employment agreement and avoid trouble for the business. If you fail to protect your rights with a proper employment agreement, you risk your employees leaving to compete against you.
On the other hand, you might not possess intellectual property rights to your employees’ inventions. This can initiate a clash between your business rights and employees’ responsibilities. Hence, you should always document employment agreements that apply to every employee.
Talk to your business lawyer to create the appropriate employment agreement form. Additionally, you can consult with your attorney when you must vary the terms of that agreement form.
Bypassing Intellectual Property
Non-tech small businesses consider that they don’t possess any intellectual risk, which is a myth. If you ignore your intellectual property, you might fail to protect your rights. Additionally, the ownership of that particular intellectual property might be transferred to others, affecting your business.
For instance, your employees might have invented new processes or technologies in your business. According to employment agreements, you may demand them to assign those new inventions to you. If you license your intellectual property to another business or company, you give away a few appropriate rights and only some of your rights.
However, intellectual property is critical expertise. Talk to your attorney to learn more about protecting them, licensing them, obtaining patents and trademarks, and resolving copyright disputes. For example, you want to trademark your company’s name, so you must research whether you can do that. Otherwise, you would have invested much in the procedure and received a legal notice.
Not Caring Much about Social Media Posts
This can be a suicidal attempt if you are not careful enough about your comments or posts regarding your business on social media platforms. Your comment might seem harmless, but it can backfire on you in this hyper-connected world of the internet. Consequently, your business reputation will be at stake.
It takes a few minutes on how to destroy a business on social media. Indeed, your business share might collapse after one post or insensitive comment. To handle this, you should craft a social media policy. Highlight how your employees should behave and represent themselves on behalf of the company on social media platforms.
Additionally, check out the tone and make them understand how to respond to brand mentions. Moreover, your employees should learn how much information they can disclose on social media. Or else it can compromise the company’s privacy.
In addition, you can keep a crisis management plan ready to address any kind of emergency. You can even hire an attorney to set rules for employee disclaimers, crediting sources, disclosure procedures, etc.
Poor Customer Service
Yes, this can devastate a business from the inside out. After all, customers are the backbone of a business. Without your customers, your business will have no revenue, turnover, or profit. Hence, your business should respect the way customers think.
Treating your customers poorly will affect your business’s goodwill. Your business can indeed have priority customers, but you can make everybody feel special. How can you improve your customers’ satisfaction? The following metrics might help you to understand the current customer satisfaction level:
- Purchase intent
- Customers’ likelihood to recommend a company or brand to their friends
- Customer expectation vs. perception
- Overall satisfaction
On a related note, you can build customer loyalty bit by bot. This will prevent your customers from being distracted by your competitors. Here’s how you can work on building customer loyalty:
- Maintaining a self-service support system
- Remembering special occasions for your customers and making them feel special
- Educating your customers
- Communicating with customers to find out what they want
You can also use social media and email to vamp up customer satisfaction. According to statistics, a company loses $234 every time a customer ditches the business. So, it’s important to make your customers feel more welcomed. Or else it can exploit your business overnight.
What to Do if Someone Tries to Ruin Your Business?
If you suspect that outsiders or insiders are looking for ways to ruin your business, concentrate on your business more than ever. You can try to find the imposter inside your company. However, what’s more, important is to increase your company’s security.
If your business is strong enough and you have taken legal measures to protect it, nothing can bring it down. Identify your target audience and work on your persona’s goals. Moreover, share your persona with your employees and content team. This will keep your intellectual property aligned with your persona.
