Seven Business Threats That Your Company Might Face

Business threats

Running a business is a roller coaster ride of ups and downs. One day, you are on cloud nine to get a massive bulk order, and the other day, you might face a horrible PR crisis. Despite all odds, businesses with good leadership and proper strategies rise again. If you play a pivotal role in your company’s growth, you need to understand various possible business threats so you can deal with them efficiently. Here are seven such business threats that your company might face. Let’s take a look at them.  

1. Raising Capital

A car cannot run without fuel; in the same way, a company cannot run without sufficient funds to manage all its essential operations. Some businesses get self-sufficient by becoming bootstrapped, while some raise outside capital from investors. Regardless of the source of capital, every business needs to raise money

Lack of sufficient money can cause the business to burn through its runtime and stop its operations eventually. If you want to keep running your business, you need to create sources of capital to invest in your company. The investor can be venture capitalists, your friends, family, or yourself.

2. Legal Issues

Legal issues are some of the most severe problems that any business can face. If you are a business owner, you must have gone through various legal processes, from incorporating your company to dealing with corporate compliance. Legal issues can cause some serious damage to your brand image as well as your reputation. If not dealt with properly, legal lawsuits become a serious threat. It can also cost a fortune for your company in legal fines. Unfortunately, many small businesses face severe losses as they have in-house legal teams or enough funds to get a law firm on retainer.

3. Intellectual Property Infringements

According to the World Intellectual Property Organization, intellectual property (IP) is something you create with your mind. It can be an invention, artistic or literary work, symbols, designs, name, images, videos, or music. If you are an IP business, you need to protect your IP. While you defend the rights for your IP and can limit its external use, make sure you don’t use someone else’s IP, which can land you in legal problems.

4. Natural Calamities

Rapid development worldwide has taken an enormous toll on the environment. The whole world is getting affected by various natural calamities like hurricanes, floods, and earthquakes. In such scenarios, many businesses and people face severe losses. Running a business in calamity-prone regions can put your business at a lot of risk. It can also cause financial pressure to rise from such disasters as many business insurances do not cover natural calamities in their clause. 

5. Reducing Market Demand

The rapidly advancing technology has had a significant impact on businesses. Every new technological advancement can put its previous version obsolete. Hence, the industry dependent on that earlier version of technology faces the problem of reduced market demand. Some technological advancements are so colossal that they can put a lot of companies out of business. For example, the invention of flash drives gave people a lot of storage space in a smaller size, which made compact disks or CDs obsolete. Today, you possibly can’t find an individual who still uses a CD for daily storage needs. Such reduced market demand can create a significant threat for businesses. 

6. Shortage of Raw Material

Businesses need raw materials to manufacture physical products. The cost of that product is highly dependent on the supply of the raw material. The constant and regular supply of raw material keeps the manufacturing process smooth. Whenever a business runs from the risk of shortage of raw materials, it can slow down the manufacturing process and cause the product price to increase. 

The catastrophic effect of no raw material can either cause the business to shut down or pivot from their original line of product. For example, traditional paper manufacturing businesses shifted their raw material source from trees to recycled paper after facing criticism from environmental organizations and government policies. 

7. PR Crisis

Public Relations help businesses to create a positive brand image in their customers’ minds. Different scenarios such as legal issues, financial mishaps, leadership, or executive changes can put your company on the public radar if you don’t have an in-house PR team. It’s best to hire an expert PR firm to handle such a PR crisis as soon as possible. PR professionals help minimize the impact of the crisis and create strategies to rebuild the affected brand image.

These are the seven possible business threats your company might face. Every business should form the strategies to take necessary actions if it comes across these business threats.


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