Founding a start-up means taking a big entrepreneurial risk. The long hours, hot competition, degree in business and relentless need to innovate mean that a lot of your hard work will be going into your start-up. And if you don’t protect your new company, all of that hard work can be lost much more quickly than you might imagine.
In the 21st-century economy, threats can come from any direction. No one can prepare for all of them, but it’s on you to deploy the best strategies available for protecting your start-up. From data security to regulatory compliance and beyond, these seven strategies can provide focal points for your efforts to create a sound and secure start-up that’s ready to disrupt, innovate and grow.
1. Data security is essential
Any business, of any size, needs to worry about data security, but it’s particularly critical for start-ups. A Target or Home Depot can absorb the blow of a data breach, even a large one—but it can be the kiss of death for a start-up. Thus, you need to ensure that your data is protected from some of the common security threats that plague start-ups:
- Unsecured IoT devices.
- Employees who access corporate data from their personal devices without proper security measures.
- Lack of thorough vetting on data security vendors.
- Not taking employees seriously when they voice concerns about security issues.
- Insufficient security of access to physical assets such as server rooms.
2. Don’t let your financial compliance fall behind
It’s easy to neglect bookkeeping in the early days of a start-up. When everyone’s focused on perfecting the next iteration of your source code, paying taxes might be the last thing on your mind—but that doesn’t make it any less important. Even if you didn’t make any profits or sell any products yet, you still have to file federal and state income taxes.
There’s some good news about paying your taxes as a start-up: You can deduct many of the expenses associated with starting and operating your business. But you still have to file, and file correctly, so enlist the services of an accountant who specializes in start-ups before the IRS comes calling.
3. Work as closely as possible with regulatory authorities
The news is full of clashes between the power players of Silicon Valley and the regulatory authorities in Washington, D.C. While the matchups created by the “move fast, break things” ethos might be thrilling, they also often result in these companies spending millions on fines and legal fees.
Thus, it’s better for a start-up to work with regulatory authorities, rather than against them, whenever possible. Which regulators you’ll need to work with depends on which sector you’re in, but start out by looking through a list of laws and regulatory agencies to find the ones that will be relevant to your start-up and reaching out to them for guidance if necessary.
4. Create a climate of compassion and honesty
There’s simply no substitute for having the right culture in place inside your start-up. What that culture looks like varies based on a variety of factors, but it tends to have some common elements:
- Employees feel comfortable coming to management with requests and concerns.
- Employees don’t feel like they need to engage in unethical or illegal behavior to have their needs met or to succeed in the company.
- Employees feel valued, engaged and secure in their needs.
- Employees know that harassment and discrimination aren’t acceptable in their workplace and feel comfortable calling out bad behavior.
Why is this essential for your start-up’s security? On an immediate level, these aspects are critical for recruiting and retaining talent. But in a long-term view, employees who work in a culture that helps them thrive will also do more to protect the company and to help guide it in an ethical and sustainable direction.
5. Surety bonds will help protect your customers and your reputation
Surety bonds aren’t always a common topic of discussion in the start-up industry, but there are some good reasons why they perhaps should be. These bonds provide a monetary guarantee that your start-up will operate legally and ethically, and they protect both your clients and your reputation.
Many businesses, such as construction and auto sales, require a bond purchase to get a state license, while others, such as housekeeping services, use optional but highly recommended business service bonds. While many start-ups operate outside of industries that require bonds and licensure, it’s nonetheless a great idea to look over the types of surety bonds available and determine whether they can help protect your start-up.
6. Prioritize sustainability
The corporate world’s newfound focus on sustainability isn’t confined to food production and heavy industry. In fact, it falls on every business, including start-ups, to ensure that they’re following sustainable business practices, including:
- Reducing packaging of consumer products.
- Using energy-saving smart systems for lighting and air conditioning.
- Recycling or reusing everything you can in the office.
- Buying items with a lower carbon footprint for the break room.
- Going above and beyond required environmental standards.
- Hiring local talent whenever possible.
Sustainability is the ultimate long game in that, although immediate benefits may be modest, the long-term implications are tremendously important—and thus, vital to protecting a start-up’s future viability.
7. Follow the “front page rule.”
The “front page rule” is the closest thing 21st-century public relations has to a golden rule. It goes like this: When you’re making any decision, ask yourself what it would look like if it were reported on the front page of the New York Times (or, perhaps more relevantly, if it started trending on Twitter). If it would cause embarrassment, public hostility or damage to your company’s reputation, it’s time to consider whether it’s really necessary and whether other paths exist.
There are no sure bets in the new start-up economy. Taking risks and being bold are woven into the fabric of the 21st-century tech landscape just as much as the smartphone or the personal computer are. But by taking the important steps we’ve talked about here, your start-up can protect those vital investments of time, effort and technology.