Starting a new business always comes with some level of risk. It’s impossible to eliminate all potential contingencies, and there’s no such thing as a completely foolproof plan. However, there are several ways that you can minimise risk and increase your odds of success. Here are three suggestions:
Write a business plan
It may seem old-school, but devising a formal business plan is still an incredibly important step in starting a business, and will guard against some of the financial and marketing risks you may come across in the future. Although most end up being quite lengthy and in-depth, getting started on your business plan is often far easier than it seems. Templates are available from government resources online and can help guide you through the process.
A solid business plan usually includes sections on your business objectives, sales strategy, marketing strategy and financial strategy. It should also include your targets and forecasts for sales, marketing and finances and you may want to list resources where you can research rival businesses, such as the Companies House website. This document will be your guidebook throughout the early stages of your business and is often essential when applying for grants, loans and investment funding.
Of course, financial risk is one of the biggest potential vulnerabilities of any new business.The best way to combat it is to secure an adequate level of funding prior to launching your startup. Rather than drawing from your own savings, keep outside investment and funding in mind; there are many people, companies and organisations looking to invest in startups. There’s money out there, it’s just a matter of convincing people that you’re the right candidate for it.
Look into grants provided by government organisations. Network with potential ‘angel’ investors – individuals willing to fund your business personally. Compare business loans to ensure you’re getting the best deals. Aim to have a diversified funding pool so that your financial risk can be spread across a number of different sources.
Get a mentor
Actually launching a new business is fairly straightforward in the online age. However, the next stages – the selling, marketing, negotiating and budgeting – are far more difficult to manage. This is where a mentor can be of great help.
Whilst the concept of having a ‘mentor’ may seem like something reserved for talented children or troubled youths, it’s also applicable to entrepreneurs. For many entrepreneurs, it’s in their nature to be independent and even defiant at times. This quality is what drives them to succeed, but it’s also important not to be afraid to ask for advice from time to time. Industry experience is one of the best safeguards against risk. Seeking out a business mentor – someone who has years of experience in a similar field – can prove very useful as you navigate the unknown waters of a new business endeavour.