Tag Archive | business risks

How to Start Your Business and Reduce the Risk of Failure

In case you found yourself in a dead end job last year and would like to become financially independent, or you have long term plans that don’t involve doing a job 9 to 5, you should create a plan and startup strategy.

The bad news is that over 80 percent of startup businesses fail in the first few years (this figure is higher, according to some experts), so you need to be prepared for the challenges ahead. Below you will find a few tools that will help you create a successful strategy.

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1. Create a Vision Board

Before you start a business, you will need to know why you are doing what you are planning to do. Your vision should be related to your professional and personal life. You might want to spend more time with your loved ones, or simply have a more flexible work schedule.

Once you know what you need, you can start finding the right business model. You can make money without having your own product or service, too.

You can read more about the different methods at  https://budgetboost.co/how-to-start-a-drop-shipping-business-from-home/  and start experimenting with ideas.

2. Improve Your Skills

If you would like to transition from the world of an employee into being self employed, chances are that you will need to learn some basic discipline skills and understand the importance of taking responsibility for your actions.

Your success or failure will no longer depend on your supervisor, but yourself. Whether you need to step up your game when it comes to organization or communication, it will help you succeed.

3. Have the Right Mindset

Many entrepreneurs will tell you that it is all in the head. You will need to create the right mindset and get rid of negativity that might hold you back from success.

If you don’t believe in yourself, how can you expect your potential customers to do so. You can find plenty of motivational books that will help you frame your mind for success and improve your skills to deal with challenges while staying positive.

4. Secure the Funding

No matter how good your business idea is, you will not succeed if you don’t have the investment you need to start things moving in the right direction.

One of the main risks new businesses face is related to their finances. You have to create a realistic plan and profit predictions, so you don’t run out of money before you would break even and start generating profits.

5. Get Support

If you are not an expert at digital marketing or need help designing your sales funnels, you will need to accept your limitations and get professional help and support.

There are plenty of great online training programs, but you might also book a consultation with a digital marketing expert to get some ideas on how to get your business noticed online.

There are plenty of risks associated with starting a business. Make sure that you address them one by one and get yourself ready for the challenges ahead.

4 Business Risks All Small Businesses Need To Know About

Being able to work for yourself and setting up your own business can be a dream for many people. It can be the challenge of creating something for yourself that you can drive to be a success, as well as being the person in control and being your own boss. And all of that sounds well and good, right?

But if that is the case, why don’t more and more people do it? The reason being, is that there are definitely some risks involved with running your own business and being your own boss. There are risks each day when you’re working for yourself, and you have to be the one to deal with it, rather than someone else.

That being said, there are many advantages to working for yourself and running a business of your own. But to help provide some balance, here are some of the risks that you may face, and the things to be looking out for. Then you can be in a better place to manage your risks successfully.

1. Physical Risk

There are going to be physical risks to your business, because your business will be made up of physical things. From laptops, computers, offices, and warehouses, these will all carry risks for your business, and things need to be put in place to make sure that you are able to deal with it all.

There can be a whole host of things that can go wrong with the physical things that you have, such as natural disasters, fires, theft, and vandalism. Insurance for your business is a must really, as then you at least have protection should anything like that happen to your physical business.

You won’t want to slow down production or growth because of having to deal with something stolen, for example.

2. Strategic Risks

The decisions that are made for your business will bring some form of strategic risk for the business. The choices that are made are generally made to help the business to achieve the goals or aims that you have set out for it.

But there is always going to be a chance that what you choose doesn’t go to plan. There could just be plain bad or ill-thought out decisions that are made, as well as just not being able to execute them clearly, or that they are not rolled out in a good or timely way.

Cash flow can be a problem when there are strategic things that go wrong, as well as missed deadlines or lack of sales.

In order to combat this kind of thing, it is a good idea to regularly check over your business processes, and keep on to of what is going on. It is also a good idea to set yourself clear key performance indicators, to check that you are on track for things.

3. Development Risks

In order to help your business to grow and do better, then there are going to be a certain degree of development risks that come as a result of growth.

It could be the decisions to relocate or move things offshore, that could lead to other issues out of your control, such as government changes or legislation in the new country, or things like service provider risks. When you expand you may choose to outsource to suppliers or vendors.

And it can be a risk as they have to meet things at their end in order for you to meet your deadlines. So research for all of this kind of thing is really key.

4. Technology Risk

We live in an ‘information age’ where we have access to so much at our fingertips through technology. And as a result, it is highly likely that you use technology in your business.

There are risks that are small, from things like power outages, to things that are much more serious like malware issues, or cyber attacks. These things can lead to down time on your business, loss of profits, and even data breaches.

Which is why making sure that you have the right backups in place, as well as things like anti-virus software in place, can be really key to helping minimize the destruction that a technology risk can have on your business.

 

As you can see there are risks that can come to your business. But there are also things that can be put in place to deal with them. You just need to put it all in place, before things get started.

 

Common Causes Of Workplace Fires: How To Protect Your Business

 

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As exciting the idea of running your own business might be, it could all go up in smoke with just one mistake.

The threat of a fire is an ever-present one, and it can occur for all sorts of reasons.

We’ve gathered some of the common hazards to watch out for, as well as some helpful tips to prevent them in the first place.

 

1. Human Error

It’s far too easy for human error to become a factor in a workplace fire. It’s one of the most common reasons they start, to begin with, and it’s not hard to understand why.

All it takes is one person to burn something in the kitchen or spill a drink onto electrical equipment to cause a huge hazard.

The best ways to avoid this from occurring is to implement effective fire training for your employees. Whether you do this via an in-house seminar or provide e-learning tools is totally up to you.

 

2. Electrical Fires

It might not surprise you to hear that electrical fires are possibly the most common cause of all. The obvious dangers come in the form of loose wires, overloaded plugs and much more.

Businesses don’t always take as much care as they should in getting equipment tested, leading to electrical fires.

Another danger comes in the form of data center rooms and systems overheating. Equipment like servers that give off a huge amount of heat is vulnerable to fires in the worst cases.

Good data center designers protect against this with fire safety measures to prevent this issue from occurring.

 

3. Flammable Liquids

Businesses that operate in factories and warehouses might come into contact with flammable liquids on a regular basis. Without the right safety measures in place, this could cause a catastrophic fire in the worst instances.

If you come into contact with these types of liquids, you need to set a clear safety policy for the business and its employees. Ensure that everyone adheres to it as necessary, or the results could be fatal.

There are easy ways to dispose of dangerous liquids safely, and outsourced companies can also help with this.

 

4. Arson

What, you don’t think this is a common cause? Unfortunately, it’s a fairly frequent thing. Certain businesses will be targeted with arson more than others, of course, but you should always prevent against it.

In particularly bad cases, an arson fire can spread across multiple buildings causing horrendous damage.

So, what can you do? Fireproof shutters are one way of protecting your business in the event that a vandal targets it.

You could also think about installing additional security measures like CCTV to deter would-be criminals. The more security you can implement both inside and outside the business; the less likely you are to be targeted.

 

5. General Negligence

Sometimes, negligence doesn’t come in the form of human error. It can take all sorts of forms, from improperly storing paper to covering air supplies. The person knows they’re doing it, but they don’t understand the repercussions.

Again, these kinds of behaviors can be solved with company training. It’s imperative to get across that fire safety needs to be taken seriously within the business.

 

The Danger Zone: How You Take the Risk Out Of Your Manufacturing Business

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It’s not a secret that manufacturing is one of the industries that has a higher risk of injury.

It’s only to be expected, given the machinery involved in a lot of those businesses.

But that doesn’t mean you just sit back and accept that there will be injuries.

Being prepared for them is important, but so is working to reduce the chances of them happening. Many of these risks also apply to the construction business.

Here are a few ways you should be doing that.

 

1. Slips, trips and falls                

It might not seem like the most pertinent risk in a manufacturing business. But perhaps that’s because you haven’t considered the risk seriously enough. Falls anywhere near a machine or storage units can cause serious damage.

Clear walkways are a necessity. Use floor markings to designate spaces where employees cannot leave any equipment, litter or other items.

Take care of those walkways when the machinery isn’t operational and make sure signage is used in excess to highlight spillages.

 

2. Protective equipment is a must

You undoubtedly already know that you’re going to need protective equipment in the business. But are you doing enough to treat like the core part of safety that it is?

An inventory system needs to be set up to make sure there is enough personal protection equipment at all times.

Inspections should be carried out regularly to assess the condition of the equipment and when replacements need to be made.

Around different areas, you should use signs to indicate which equipment is required in that area.

 

3. Training your staff

The signs aren’t going to be enough of a reminder to your staff. You need to make regular safety training a priority. Not just on how they can avoid the various risks around the workplace, but how they can prevent them.

For instance, how to maintain the equipment they work with. You should also designate employees to train in first aid and safety officer duties.

 

4. Looking at your machines

You can’t talk about safety in any manufacturing business without taking a closer look at the machines. Your staff might not be qualified to give them the most thorough of inspections. For that, you need to consider a proper PUWER assessment.

It’s important to people with the right qualifications taking a closer look at the risks in the business. Otherwise, you may find yourself susceptible to some you never even considered.

 

5. Safer driving

A lot of manufacturing businesses make use of vehicles particularly for transporting materials and equipment.

The safe driving and maintenance of those vehicles is another thing that needs to be taught. Make sure that no-one without the right license touches a vehicle. Then focus on special awareness at all times for those that do.

For instance, teach them maneuvers that reduce their need to reverse. When they do reverse, ensure they do it only after they have complete confirmation the space behind them is clear.

Vigilance and communication is the key. Ensure that you schedule maintenance and training sessions often. Your people and your equipment need to be kept up to date at all times. Don’t let it slip.

 

5 Common Business Risks and How They Can Be Mitigated

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The term risk can be defined as any circumstance where we are moved to make a particular decision/action that we are not certain of the outcomes.

 

 

Every day, we must take risks in all aspect of life and risk cannot be eliminated completely, but it can only be managed.

 

As entrepreneurs, starting a business is itself a risk since the future is unknown. But how can we ensure that we are on the safe side and manage the risks to manageable levels?
Effective risk management can only be achieved when entrepreneurs get to understand what type of business risks they are likely to face in their daily business operation.

Risks if not properly managed can cause a great short-term or long-term impairment to your business cash flows/earnings. The following are the common business risks that entrepreneur face and how they can be mitigated.

1. Market risks

Market risks occur in the external business environment. The business is subjected to price fluctuations of commodities, interest rates or exchange rates. The changes in commodity prices will affect the projected cash flows of your business.

Variations in the interest rates and exchange rates also have an adverse effect on businesses operating in the financial sectors, and it influences their lending rates.

Diversification can mitigate market risks especially for those operating in commodity markets. Venturing into various product lines that do not have a high correlation will ensure that your business will withstand the risks waves.

If you operate in the financial sector, engaging experts will ensure that your business risk volatility is determined, and they will advise you accordingly.

2. Liquidity risks

A liquidity risk occurs as a result of business transactions where liabilities from creditors and investors are not honored in time. Liquidity risks are evident in situations where the business experience low trading volumes and large bid-ask prices (where the price of a commodity falls below its fundamental value, or it takes a longer period of time for it to sell).

Creditors and investors may demand their money back if there is prove that the business is likely to incur losses that may threaten its solvency. Therefore, your business can be subjected to assets liquidation at distress prices which can lead to substantive losses.

To mitigate the liquidity risks, entrepreneurs are required to have a better understanding of asset liability management, market clearing mechanism, and optimal trade excursions.

3. Operational risks

Operational risks are experienced in day to day business activities. They are risks of losses that might occur due to physical catastrophe, human error, technical failure, and fraud and process errors during daily business operations.
The common methods of mitigating operational risks include; hedging, risk transfer, and risk sharing.

4. Credit risks

A credit risk emanates from the credit side where the counter party may fail to honor it obligations either in full or partial as per the debt agreement. Credit risks can pose a great threat to your business financial position.

In order to mitigate credit risks, you can consider transferring the risk to a third party through invoicing. Credit risks can also be managed by reducing the rate at which your business is subjected to credit risk exposure through risk avoidance.

5. Business risks

Business risks arise as a result of changes in the business plan model. It occurs in the internal business environment, and it affects the business operations which determines the competitive advantage of the business as well as it adoption to modern technology.

Business risks can be managed through risk control, and every entrepreneur should ensure that proper business strategies are put in place so as to define the business direction either in short-term or long-term processes.

The bottom line:

It is important to note that risks in business cannot be eliminated, transferred or avoided completely. If there were no risks to be taken, there could be no business!! Risks can only be managed at optimal levels.