As an entrepreneur, you are no stranger to business risks and risk-taking. Things that are at stake will usually include some of your own money. You’ll be pursuing something that matters to you personally, and you will often have traded in a secure salary for an uncertain future, in which other people depend on you for their own livelihoods.
The good news is that businesses can establish policies and strategies that cut their risk. The bad news is that overdoing risk control can close off opportunities – you will always need to embrace a certain level of risk if you want to take your business from ‘good’ to ‘great’.There some business risks that may be beneficial to your business.
So, what are the top 5 business risks that often pay off?
#1 Outsource it
At first, outsourcing feels like letting go of control, but the potential benefits are significant. Whether you’re asking for help with production issues, logistics or accounting, you’ll immediately gain access to knowledge, skills and capabilities that your business may lack. Outsourcing can save money if your supplier is able to do what’s needed more cost-effectively. One of the biggest of all benefits is that you’ll free up time to focus on what your business does best, without all of the distractions that can derail plans.
Especially if you’re just starting your business, you’ll be depending on a small team of people who work very hard to get results. Maintaining perspective and seeing who is best at what tasks is essential. It might feel scary to hand over crucial tasks to someone else, but everybody will lose out if you take on so much work that you can’t cope. Sooner or later you’ll have to ease up and let go of some tasks, so identify people you can depend upon, set some clear expectations and let them do what’s needed. It will avoid stress, improve health and boost results.
#3 Think creatively about hiring
You will have heard many anecdotes about the employee who looked as if they didn’t quite fit the usual criteria but who went on to do great things. It can be very productive to think creatively and hire someone who impresses you even though they lack the ‘right’ qualifications or the ‘proper’ degree. Consider people who are young, who don’t know the industry…the list goes on, but you get the idea. Obviously, you won’t always get this right, but an employee who has been given this sort of chance can be loyal, dedicated and there for the long haul. And while skills count, you can’t teach some of the key personal qualities that any great employee needs to provide, so trust your instincts.
#4 Invest in marketing
Funds are usually limited in the early months of trading, or if your market suffers a blip. Money spent on marketing can then seem like a low priority and you might think that it will be OK if you just make enough social posts or wait for client referrals. The truth is that you need something more structured to really drive growth. That doesn’t have to mean spending a huge sum, but a bare minimum is a presence that establishes brand identity and supports reputation building. The sales are out there with the right approach, and marketing should repay an investment in better sales results.
#5 Show that you’re human
‘Strong’ leaders are not the ones who call all of the shots and go their own way without seeking anyone else’s views. Your team will see you as stronger if you show some vulnerability. For example, if you make a mistake, it can be the right thing to do in some circumstances to share that with people. The same applies to a disappointing outcome (which also allows people to learn valuable lessons). People will see that you care and that you’re committed to success.
At the end of the day, all businesses face risks, both calculated and unanticipated. Accepting that and managing things properly will allow your business to learn how to do better, and to seize opportunities when they arise.
If you’re considering a particular business risk and need some business or financial advice, contact the experts at Accru today.