8 Most Common Risks to start a business and tips to minimize it
The No. 1 factor that stops anyone to start a business is the risk and especially the fear of not knowing how to handle it. In fact, when you think about starting a small business it is a reality that you put at risk everything from your money to your family relationships and never miss an endless questions that make you doubt and delay your project.
Unfortunately, because of not knowing how to manage the risks, many good business projects die before birth.
At this stage usually arise 2 positions: those who ignore the risk factors and blindly rush to start a project without planning and second those who do not take action and decide to do nothing because they prefer to avoid them. Both of course wrong, because you do not lead to anything positive. So, although the risk is natural in the entrepreneurial process, it is also true that you should be aware of what are the most common risks that face in the way of undertaking a business and how you can minimize them.
1. Fear of Risk
The first thing to be clear is that building a business entails risks that have to deal all the time. There will always be unforeseen or situations beyond your control you’ll have to learn to solve. The risk is something natural that will accompany you throughout the entrepreneurial adventure and most importantly not help but learn to identify and control it through a proper planning.
2. Risk Environment Changes
It must be clear that the globalization and communications make our environment changes rapidly. That means that what works today will not necessarily work within 2 years. The competition changes, customers change, the economy changes. Therefore, you must learn to change and do so quickly. You must be an entrepreneur reading, learning and constantly updated to keep your business afloat.
3. Risk Not Knowing the Business
Many entrepreneurs are uncertain about the idea of starting a business by the very fact that they do not know the operation of the business thoroughly. They have a vague idea of what they want and the excitement but do not have all the answers. What to do? As simple as it sounds. You must inform, document yourself, consult and become an expert in the business you want to undertake. I do not mean to be an expert in the technical details but in the operational details of it.
4. Risk Losing Your Money
Perhaps this is one of the largest common fears. Not knowing if it has the financial capacity to take the business forward and thus to lose your money. This can occur in the same way regardless of the size of your business run as much risk as those who invest a thousand dollars he invested one hundred thousand. And the only intelligent way that exists to minimize this risk is to take a pencil and calculator in hand to develop a budget. Always considered part of your planning a capital budget, a budget of monthly expenses and a sales forecast. These 3 exercises will let you know how much you need money to start, how to keep the business and how much return. You should work your budget as realistic as possible in order to determine well in advance the future of your business.
5. What if there are no customers or no sales?
The following risk factor that we all face is the fact of opening the doors of the business and no customers interested or does not have enough sales volume to generate income. From then this can make the hairs on end to anyone. However, this risk is also manageable. First you must make a basic market research before opening your business. This allows you to measure the potential of it on the basis of price and variety of products you want to market and discover the main market interests you may have. Now, the main reason why I have seen entrepreneurs do not make a study of market not because they do not know how to do it or because they can not learn but because they’re lazy do.
6. What if the Local Map is not good?
Choose a store is a decision that must be analyzed carefully. Remember that a nice local or on a busy street is not a guarantee that the business will succeed. I have known many cases in which the place is excellent and the location is too, except that it does not work because you have a product or service that is focused on another market, or because your prices are too high for the type consumer. So do not necessarily need a shop to open your business and to do so, you must have done a market study to help you know that your company will be accepted with pleasure and will be attractive to people in the industry. (See point 5).
7. Derivatives Risks for Competition
What if the competition is very strong or whether it is unfair? Well, I must tell you that except for monopolies, all companies in the world have the power and the vast majority have to fight against unfair competition. This is another risk you have to live (not die). First, it is desirable to develop a leadership culture where you’re laying down the rules. You should look at your competition and know what they do without you dependent on their movements to your own decisions. This is a common mistake many entrepreneurs. Another serious mistake is trying to compete with lower prices only because there are many smarter ways to compete that you can work. The secret then is not to be intimidated or pressured. Far from reacting to the first challenge for this game leads many companies to fail. If your numbers are in order and your goals are clear, you can compete with promotions, good service and speed, putting you in trouble with your competitors.
8. The Risk of Not Managing Your Business Well
Of all the internal risk factors that exist, this is one of the biggest problems you can create a business. And the fact of not having a good administration. The disorder, the way in procurement, poor management of assets and even bad hire staff to help things get out of control. Hence it is extremely important to establish a commitment order from the beginning who is responsible delegating “of everything” in the company. And if you are not the best manager, then you should seek the support of someone who takes over a function of great importance to your company is born healthy and grow internally. It is regrettable to see how companies with great potential faint by the foolishness of their owners want to control everything, when they have the powers and preparation for orderly manage their businesses, wasting money and weakening finances.
Risk is Opportunity
As a good businessman, you then know that the risk and consequences will accompany you from before opening the doors of your business and throughout your entrepreneurial experience. The risks never go away, only reduced and controlled with preparation, planning and tough decisions taken in time. And even with all this, there will be stages where things will not go as planned and that’s when the strategies necessary to analyze mildly and if necessary, change course. Finally, you should see risk as something positive that you limit yourself against let see more deeply into the huge opportunities that come your way. More tips for entrepreneurs.