In this article I will be covering how to minimise startup risk, as most of us know starting a business comes with an avoidable risk every business person has to take.The attitude towards the job and the dedication of the entrepreneurs is what makes them credible business people. Being diligent and caring about the quality of your work is always a factor in any business.Taking risks is very important in any business for it opens up to new challenges and opportunities as well as empowering you to establish new limits in your mind.It also makes one become more creative which relatively results to one breaking free from the average way of living and thinking.
Lack of startup capital poses a considerable threat to a new business. As an entrepreneur, one has to save enough money to start the business and always avoid taking loans as your startup capital. When you take loan as your startup capital, remember there is interest to be paid to the bank monthly and this is most likely expected to come from the new business.This will strain your business unlike when you use your own savings as your startup capital for you are not paying for anything and instead the money you will get from the business will be saving for the expansion of your business.
If you are already employed, do not resign for your new business for in order to minimise the startup risks, one should have more than one source of income. You can operate your business part time hence not relying on your new business fully.Manage your time appropriately.Have priorities, do the urgent thing first .Always work on budget to ensure that you are organised and avoid unnecessary expenses. Go for what you can afford and never compare your new business with anyone’s which has been in existence for along time for this might discourage you. Rome wasn’t build in a day. Above all, set goals for without goals you will never score.
You can start by registering your company for marketing purposes. Don’t make a mistake of making brochure or booklets which are too expensive.instead,make plenty of business cards for they are cheap.Ensure they have the important information about your new business e.g, your business name, what you do, your contacts, location etc. Distribute then to the potential clients and for sure, this will be of great help to your new business.
Tell the clients what you do.You might not have the machines which does the jobs in your field but your friends have it. Once they bring you the orders, do the quotations under your registered name, then outsource at a cheaper price then sell to the clients at a profit.This way, you will end up saving enough money to purchase you own machine.
Once you have your own machine, first consider the location of your business. Ensure security is tight because it might be very embarrassing to buy the machine and the following day is missing.Consider the office rent. it must be affordable otherwise you might end up working for the office. At this point, you may look for someone to work in your new office. Let the new person work on commission until the business picks. Whatever comes out of the business should for the business and the reminder deposited in to the business account which you have to open once you register your company.
Competition will never miss in any business.To beat this, make cheap ,unique and stylish product to cope with the competition.Communication skills are vital for taking in information and passing it along.Your language skills must be proficient enough for you to be accurate and concise in your speech and listening to the needs of your customers.This is commonly referred to as business language. Beware of fixed cost too. The same product someone can get it cheaper the next shop, make sure your prices are negotiable to encourage customers to buy from you.
Bad debts is a key startup risk and should be minimised by ensuring you are a debt free person. The debtor may stress you up demanding payment which in turn results to poor performance and less concentration.
Poor business management can lead to a business collapse.Hiring a manager will definitely be costly . In this case, you can go to the successful entrepreneurs who are in the same field as you and seek business managements skills from them for free.If they have business meetings you can join then to get better business management skills.
Be curious, ask questions, seek to know the challenges they are facing and how to overcome them, ask them where they get the cheapest products etc. Do thorough research and be ready to take up the challenges. Do not be afraid, embrace every situation with a smile,never loose hope. Remember whatever does not kill you makes you stronger. Have the determination of a mirror which does not loose its ability to reflect even when broken in to two.
To minimise startup risks, one should never underestimate their own ability.There is so much information available, you can often teach yourself the basics. Later, when the required money is available, you can hire a professional to polish the projects.Have faith in yourself and being ambitious should be your portion.You should also learn to read your financial statement.
First, as an entrepreneur, you should know what your cash flow is at all the time. Secondly, prepare a profit and loss report to know whether you are operating at loss or profit. This is very important because without it then than means someone will be operating the business blindly which can result to the business failure especially when operating at a loss.
Starting a limited liability company can be of help. Its much easier because financially there is separation between owner and the company and in case something goes wrong with the company yo can be sure of personal belongings safety.
It’s that simple, so try it out!