Businesses of all sizes risk becoming unsustainable and folding — no matter the economy or industry — if they aren't careful about their strategy for growth. Startups are particularly vulnerable when they hit snags or roadblocks, because they don’t have a loyal client base or established footing in the market to help them weather tough times. Considers these tips to help reduce the risk of a failed business.

Protect your cash flow

Mismanaging cash flow is a top reason for insolvency issues that cause businesses to fail. It’s important to understand the difference between cash flow and profitability; your business could bring in plenty of revenue, but you could still run into cash flow issues if the money goes out to pay for expenses faster than payments come in. To keep your accounts balanced, you need an organized and efficient billing process and a solid handle on inventory management. Try to borrow money before you run out (while your numbers are still good). Always look for ways to cut costs, improve productivity, and retain clients who pay on time.

Strengthen your network

Who you know can have a big impact on how your company grows and what doors are opened for you. Keep building your network and meeting people who could positively influence your business or your ideal target audience. Knowing a diverse group of leaders, decision-makers and business owners can help build your customer base and give you more flexibility to pivot if needed.

Get insurance

Protect your business by getting insurance to cover accidents, theft, vandalism or natural disasters. Make sure you understand what your plan covers and how it protects your property, customers and employees. A dedicated and knowledgeable agent can help you understand plan options and improve your peace of mind.

Diversify your offerings

Relying too heavily on a single solution can cause a serious problem if the market changes. It’s always a good idea to spread out your bets and put effort toward multiple moneymakers. When you diversify your offerings, you are more prepared to outpace the competition and stay relevant to your customer base.

Keep organized books

Documenting everything and managing your books is a crucial part of keeping your business compliant and on track for success. Detailed and organized records will help reduce miscommunications, fraud and theft that could hurt your business’s bottom line. In addition, set up internal safeguards, such as segregating duties and establishing monitoring policies, to help minimize mistakes and protect your business. If organization isn’t your strong suit and you don’t have extensive experience in accounting, you may want to consider getting outside support from a professional.

Make intentional hires

If you choose to bring on supporting staff, the wrong hire can hurt your productivity, bottom line and company reputation. Consider each candidate’s work ethic and abilities — how will this person represent your mission and add value to your company? Be picky about who you hire, making sure their values and long-term goals align with your company plans.

Protect your data

Be proactive in how you approach data privacy and digital document management. Make sure your team knows the risks and understands best practices for cybersecurity. It’s easy to feel like cybercriminals won’t target you, but the aftermath of an attack can be devastating to a business. Safeguarding your data is a crucial part of remaining compliant, retaining customer trust, and avoiding costly security breaches.