Three steps to minimise risk and succeed when starting a business

Starting your own business is as scary as it is exciting, and let’s be honest, it’s pretty exciting. It can be tough to take those first steps, but there are a number of things you can do to make the plunge seem a little less terrifying.

All these things revolve around the concept of minimising risk. The ability to minimise risk is one of the most important things you can learn when starting a business. While every business decision incorporates an element of risk, decisions are more likely to pay off when you truly understand the risks involved.

1. Analyse your situation

So how do you minimise risk when you are just starting out? The first step is to gauge the level of risk you are capable of carrying. Do you have half a million dollars in savings to survive on if everything goes pear-shaped or are you starting your business while working a full time job and paying off a mortgage? Depending on your circumstances, the risks you might be willing to take will vary. Understanding exactly what risks you can afford to take will help you work out what you need to do to give your business the greatest chance of success.

2. Fools rush in

The simplest way to minimise starting risk is to start small. When I started Broadband Solutions, I purchased a second hand router and ran the company from the smallest office I could find! If cash flow is a concern, rather than quitting your job to start your own full-time business, why not work part time from home and build your business on your day’s off? This will allow you to have a level of security while you figure out the nuances of your business. As your business grows you can transition to focusing on it full time!

3. Measure twice, cut once

Another way to reduce risk when starting your business is to undertake proper due diligence. This might sound like hard work, but really it’s about ensuring that you have dotted your i’s and crossed your t’s. Have you made a business plan? Have you figured out how you are going to service your customers? Do you have enough stock to meet your customers needs? Ensuring that you have the essentials covered from day one will drastically reduce the risk involved in getting started.

So while it might be scary to start a business on your own, being sensible and systematic about the process will drastically boost your chances of success.

Have you started a business? How did you reduce your risk when starting out?

This article was first published on SmartCompany.

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