March 3, 2023
Starting your own business is an exciting time as you chase your dreams of becoming an entrepreneur. Many entrepreneurs are risk-takers by nature, who have to embrace the unknown as they launch a new product or service into their industry.
When starting a new business, you should have plenty to look forward to, from being your own boss to trying new things. But there are several risks to be aware of that can impact your chances of success. Here, we’ll cover some of the risks when starting a business and how to minimise them.
If you’re considering starting a business, it’s important that you prepare for potential risks that can threaten your business’ success. Of course, some risks are difficult to avoid, such as economic decline and market demand. But if you can find ways to mitigate potential risks, this can stand your business in good stead.
Here are some of the most common risks that affect new businesses and how to tackle them:
The excitement of starting a new business can make it easy to turn a blind eye to the financial risks associated with a startup. Being aware of these financial risks can help you make the best financial decisions for your company, and help you reap the rewards.
To increase your profitability, you’ll need a strategy to grow your sales and generate revenue. You may be relying on investors to get your business off the ground, and they’ll be expecting a return on their investment. So, it’s important that you have a plan in place to generate revenue and make a profit. Offering promotions to boost volumes of sales, and developing new products or service lines can be great ways to increase your profits and ensure you’re in a comfortable financial position.
To get your business up and running, you may choose to take out a small loan to tide you over until your profits start soaring. There are several types of loans and grants available to small businesses in the UK. In terms of grants, the government offers a variety of financial support options for new businesses that need financial aid.
Another risk to be aware of is sustaining your business over time. Making sure you have a financial plan in place that shows income projections, expected return for investors and how much cash you’ll need to break even can offer you peace of mind. Without planning ahead you could risk financial strain or even bankruptcy – so it’s vital that you have a roadmap in place to ensure financial security.
When starting a business, it’s important that you meet the standards of your industry and any compliance requirements. Here are just some of the regulatory requirements for business owners to consider:
Another potential risk to be aware of when starting a business is what are known as operational risks. These include processes, systems or events that disrupt business operations. If not handled correctly, operational risks can threaten business success. Some examples of operational risks you need to be aware of include:
Your brand or company’s reputation can undoubtedly influence your customers’ decision to purchase. So having the unexpected strike can cause damage to your business’ reputation, leading to a decline in sales and profitability. Ensuring you have a plan in place to maintain your reputation can help mitigate the risk of a bad scenario occurring and your reputation being at stake.
Reputation management is a way for you to monitor how your customers perceive your business and take the necessary steps to improve your brand’s image. Often, this is centred around monitoring your company’s reputation in reviews and through social media like Instagram. But there are other steps you can take such as:
You’ve put a lot of time, money and effort into bringing your business to life, so it’s only right that you’ll want to protect it. Here are some ways you can help to keep your business safe for long-term success:
Here at Protectivity, we specialise in business insurance for small businesses across various industries. Our tailored business insurance can protect you against the unexpected, so you can embrace your new challenge to the fullest. Perhaps you’re a personal trainers needing personal trainer insurance who is starting their own business. Our affordable business cover can give you the peace of mind you need to open your new business with confidence. Get a quote for your small business insurance today.