Business is risk, and can sometimes seem entirely like a process of risk-management. But without risk, there is no reward, and so it’s worth taking an objective look at the risks involved in your business. Many are obvious, but it’s the ones not thought of which can sneak up and strangle your efficiency…or worse, end your business entirely.
Your product or service might be needed now, but what about the future? Complacency is a killer; what are the prospects for long-term demand? Don’t revolve your business around short-term demand, and expect it to last well into the future. Are you set up to service an industry that’s on the way out, or do you make a product that’s heavily based on a trend or fashion? Chances are if that trend or fashion appeared quickly, it will disappear just as fast.
2. Cash reserves
New businesses often work on razor-thin margins, until they can establish themselves and starting generating income. It’s worth having a more money on hand as an emergency fund to fall back on and cover any unforeseen circumstances – while it may be tempting to max out the credit cards to give your business the best possible start, a good start isn’t worth anything if the business isn’t prepared to overcome any future challenges.
3. Proper workplace safety
The rush to market can often run right by some of the more basic – but vital – needs of a properly-run business, and yes, health and safety is a big one. It might be tempting to save start-up capital on used equipment that’s cheap because it’s been run-down by a previous owner, or skimp on safety equipment. Don’t do it! Invest in a safety audit done by professionals like DRA Safety to make sure you don’t miss anything that could cost you in diminished productivity – or something worse, like a lawsuit – down the road.
4. The right insurance
Insurance is there for everything your cash reserve can’t handle – hopefully, you’ll never have to call on it, but if you do, you’ll be eternally grateful. This may seem like a lost cost, but it’s utterly vital, and often a requirement for many investments and business loans. Make sure it covers everything relevant to your business, not just fire and theft. If you’re in a flood-prone or cyclone-prone area, make sure it covers pertinent natural disasters. And this goes beyond business insurance. You should also have relevant personal insurance. Private health insurance can get you back to work sooner should you suffer from an illness or injury. And, final, some sort of income protection should also be looked into if worst comes to worst and your business fails, and you need money while you sort things out.
5. Investing in people
Can you really do this on your own? Can you afford to hire less-skilled or experienced staff? It may be tempting to cut corners here, as people can be the biggest outlay for a new business…but good people can also be the most profitable. It pays to hire competent, diligent, and well-trained staff. Poorly-suited staff can cost you time, money, and clients. And while it may mean sharing some of the glory of starting your own business, it also means sharing some of the burden.
Don’t fall into the trap of forgetting any of these common mistake that many start-ups make in their first years of operation. These may seem like annoyances, but are vital for long-term success, and a better business all around.
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