According to the U.S. Bureau of Labor Statistics, roughly half of all start-up businesses fold within their first four years. The truth is that business owners,visionaries, and entrepreneurs face daily setbacks to their respective operations. Sometimes those setbacks are devastating.

They can include the loss of a major client or contract; aggressive competitors gaining market share; infringements to your intellectual property or copyright portfolio; a fire or natural disaster affecting your physical location; an inability to secure funding to remain solvent; civil litigation against your company; product quality failures or supplier issues — as well as dozens of other possible “bad news” situations.

Entrepreneurs have varied audiences to whom the “bad news” must be conveyed, ranging from clients, regulators, investors, employees, or their own family members. Regardless of the scope or scale of the bad news, here are three things to keep in mind when negative developments need to be shared with others.

1. You need to share it first.

An important aspect of leadership is accountability and ownership. As the boss or team leader, it’s your responsibility to communicate with your team and stakeholders when adverse events necessitate.

When I have simultaneously managed both internal employee communications and external media relations, I always first communicated bad news internally. Trust is trampled when employees find out about reductions in force, pay cuts, or office closings from the media before hearing from management.

The messenger matters when it comes to sharing bad news to relevant audiences. That messenger should be you.

2. You need to share it fast.

There’s truth in the cliche that, “Bad news doesn’t get better with age.” With that in mind, it’s important to get your facts straight first and then accurately share the news as quickly as possible.

Getting gloomy news out to your people as soon as you can conveys a level of respect for them and confidence in their ability to help work through the challenges together. However, sharing accurate information is equally as important as the speed of the communication.

Get the facts. Get them out fast.

3. You need to share it fully.

My grandfather used to have a bunch of Will Rogers-esque witticisms. One of my favorites was, “It’s better to take one big bath, than a bunch of little showers,” which served as his standard commentary anytime a politician, celebrity, or public figure got ensnared in a scandal or coverup.

Grandpa’s clever quip holds especially true when it comes to sharing bad news. Strive to share all that you can, or as much as you can, with your team. It’s important to fully disclose as many facts and details surrounding the unsavory news as possible, while reiterating to your people that additional timely updates will follow as necessary.

Transparency will help defuse rumors and alleviate the uncertainty that follows bad news. 

While you can seldom control bad news, you can absolutely control when, how, and who shares it. Applied consistently, those three factors can help impact whether your start-up business is successful or a Labor Bureau statistic.

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