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5 Scenarios Where Panic Can Destroy Your Startup Missed a deadline? Lost an important client? Facing an unexpected competitor? Stay calm and react with a plan.

By Larry Alton

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


Staying calm in a crisis is often easier said than done. When an emergency or unexpected and disruptive situation hits, your adrenaline rises, your thoughts start to race and your body and mind both go into reaction mode. Those fast, impulsive reactions are beneficial in some types of emergencies, like that of an older world where a predator was chasing you. But in the modern business world, such reactions usually create more problems than they solve.

Related: 5 Tips for Dealing With a Personal Crisis or Health Issue While Running a Business

The following five scenarios are especially sensitive to anxious reactions. So, instead of resorting to panic and instinct, take your time to approach these dilemmas carefully and methodically:

1. Getting behind schedule on an important deadline.

"Deadline" has an intimidating sound to it, and the prospect of missing one can throw you into a panic. Let's say you're preparing for the initial launch of your online store, and you've set up everything (ads, initial customers and order-processing staff) to get ready for a certain date. Your developer, however, tells you that at least another week is needed.

In panic mode, you try to rush the project to get it done no matter what, resulting in an unfinished or sloppy final product. Or you start calling up and cancelling everything you had planned for the original launch date. Not a good response, right? A better, less panicked approach is to sit down with your developer and discuss what compromises (from either side) need to be made to meet the launch date. Then, if there is no favorable solution, start rescheduling only the most important extra features of your plan.

2. Losing an important client.

Without clients, there wouldn't be businesses. That explains why most startups and small businesses are overly dependent on their initial clients to get things rolling. If you have only one or two major clients, the departure of one can put enormous pressure on the rest of the business.

A panicked reaction to this situation will be to drop everything and pour all your effort into sales, or to desperately plead to retain your old client's business back. Instead, objectively analyze what went wrong, gradually adjust your sales efforts if necessary and make budget cuts until you find a suitable replacement. Panicking will only make the situation harder to deal with.

Related: Do You Have a 'Business Continuity Plan'?

3. Facing a new competitor.

You may have entered the market with a known competitor or two, but you had time to plan for those. When a new competitor emerges, and is one that has prepared for you, it's easy to panic. Your entire business is threatened by a very similar, and possibly superior, alternate version. In a panic, you'll start slashing prices or radically changing your business to fit a new dynamic. But neither of these measures is necessary.

Instead, come up with multiple ideas of how to respond, and put those ideas to the test using market research. Invest only in the ideas that have real promise for disrutping the new competitor.

4. Seeing a process fail.

As the visionary responsible for your business' creation, you'll typically regard your operations plans as flawless. After all, had you thought them flawed, you would have already corrected them. Then, when one of those processes does fail, you see this outcome as a reflection of the business as a whole. For example, if your packaging workflow results in an egregious error, you may take it as a sign that the business is weak.

This panicked overreaction can make you try to "fix" things that aren't really broken. Instead, calmly and objectively perform a root-cause analysis, and correct only what needs correcting.

5. Parting with a co-founder or staple employee.

Working with a small team can lead to the misconception that these people are going to stick with you forever. If those workers are especially integral to your business or especially close to you, that feeling only intensifies. Then, when one of your star employees or co-founders leaves, you suddenly feel that the entire company is failing. To stop from panicking, remind yourself that the entire company isn't going under: You've just lost one role that will need to be replaced. And even though that task will be tough, any role is feasibly replaceable.

In the end, it's not easy to control your emotional reactions, but if you can temper your approach with these five situations, you'll be able to prevent the bulk of potential complications.

One of the best ways to prevent yourself from panicking is to make a plan in advance. Sit down with your team and come up with "crisis plans" that give step-by-step instructions for dealing with extreme situations. That way, instead of allowing your reactionary brain to dictate the situation, you can switch to a pre-made battle plan that was wisely and carefully created in a state of calm.

Related: Is 'Ransomware' Terrorizing Your Site Visitors?

Larry Alton

Freelance Writer & Former Entrepreneur

Larry Alton is an independent business consultant specializing in social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.

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