So much of what we think will contribute to the long term success of our business has to do with what we actually do, the energy and commitment we bring to the role and the gaps in the market we’re able to locate. While those things are all well and good, and are indeed important to the prosperity of your business, your biggest asset as a business owner will be to be prepared for the many risks that can affect your business. Take care of this aspect of your business and you’ll have a solid groundwork from which to move forward.
Finding Out What The Risks Are
It’s impossible to create a blanket approach that’ll stop all companies from being affected by the risks that are out there, because no two businesses are the same, and neither are any two business owners. As such, you need to be looking specifically at your company and deciding for yourself the risks that it is susceptible to. It may be necessary to hire an outside expert to do a thorough risk assessment of your business, as it can be difficult to “see” them for yourself if you’re too close to your business (as we’re sure you are).
Looking Beyond Your Business
While looking directly at your business and the risks that are posed to its structure and operations, it’s also important to look at the outside risks to your business. And by that, we literally mean outside risks: as in, mother nature and the damage she could potentially inflict on your company. If you live in an area that is liable to receive extreme weather or which might be affected by climate change in the coming years, it’s important that you’re well aware of what these risks are in order for you to do something about with plenty of time to spare.
Keeping Your Reputation Intact
Every company can suffer from reputational risk. The key is to minimise the ways it can affect you, because most of it does come from errors that the company have made – not from outside sources, though it is obviously outside sources who will identify your errors and hold you accountable to them. It’s important that you think clearly about anything you put out there with the company’s name on it, and also that your employees have clear guidelines on what they can and cannot say. Finally, ensuring the reputations of the other companies you work with are sound can also reduce your reputational risk, too.
Protecting Against Your Partner’s Failures
Sometimes, some of your failures aren’t about anything your company did; they’re about what your company partners did, or didn’t do. Would you be able to stay fully operational if one of your key partners went out of business? Ensuring you have a number of stock providers can be one solution, as can getting software escrow if you use another company’s software as a key part of your operations; if they fail, you’ll still have access to the software you need to do your job. It’s hard enough to keep your company afloat without worrying about other companies, so the best you can do is ensure any failure they might have won’t affect you.
Following the Rules
As you’re probably already aware, there are many, many rules that businesses have to follow in order to be fully compliant with the law. Not doing so can land you in big trouble, and in some cases can spell the end of your business. It doesn’t take much for a broken law to be revealed to the authorities – a disgruntled employee or random spot check can do it. Make sure you’re on top of any new rules as soon as they’re announced and help yourself to avoid any headaches further down the line.
Perhaps the biggest risk you can take is failing to innovate. You can be happy with your company all you like, but if you’re not looking at ways to push it forward then your lack of growth will eventually catch up with you. There are stories of big companies failing because they ignored the chance to adapt to new trends, so it can happen to anyway. Essentially, you need to never be content with sitting still. Conduct your research, explore new options, and take your company to the next level – the only other option is going down!
Keeping Tabs on the Opposition
If you’re not keeping an eye on what your rivals are doing, then you’re at risk of falling behind. It’s as simple as that. You don’t need to dedicate too much of your time or resources to monitoring the things they’re doing, but you do need to be aware of them – and aware of the broader trends within your industry. You are not an island and you are not able to navigating the murky world of business all on your own. If you do, you’ve got every chance of drowning.
The Unavoidable Disasters
You can’t be prepared for every bad thing that might come your way. For example, if there was another economic crash (and by all accounts, there will be at one stage), then the fate of your company may be out of your hands. There are ways you can prepare for the worst, however, and you should endeavor to make these part of your company plan. It’s all good and well reducing risks when times are good; it’s much more difficult when times are bad.
We talk a lot about risk, but remember you were taking a risk when you first decided to set up your own business. As such, you don’t need to treat is as something that is to be avoided at all costs. Sometimes it’s the biggest risks that have the biggest pay offs. If you have another product or service you think might succeed, then it’s much better to launch and see how it does rather than be put off by risk. The key part is to not risk too much of your company’s prosperity in order to make it a success.