As an entrepreneur, it is not unusual to encounter various forms of risks; however, there are proactive measures that one can take to avoid some of these preventable risks. Also, there is this notion about entrepreneurs as being passionate risk takers; this myth is nothing more than what it is – a myth.
In business, the main aim is to make profits with minimal risk; all businesses have risks. However, some of these risks can be avoided when properly approached. Every successful businessman/businesswoman knows what risks that they should take, and which ones to avoid. Anyone that desires to be such an entrepreneur does not only need to know what risks are preventable but should also be able to understand the best techniques to take in avoiding such risks.
In this article, I shall briefly discuss seven effective tactics that entrepreneurs can take to avoid risks in business. These seven tactics are essential for an entrepreneur who plans on becoming successful.
How to avoid risk in your business venture
First, on the list is taking proactive decisions. For anyone to succeed as an entrepreneur, they must first decide what they want. If you do not know the reason for going into business in the first place, then you are guaranteed to fail even before you have started.
Making decisions about what you want from your business and how you can achieve is the first step to take in avoiding preventable risks in business.
2. Ensure that you can make a profit
Before taking action on any business venture that comes with risks, it is important that you as an entrepreneur considers the investment whether it is worthwhile – if it is profitable – before committing to it. Most businesses have crumbled due to the business owners not weighing the risks against the profits of what they see as a “potentially” profitable business venture. Entrepreneurs can avoid risks in business when they take their time to consider how much profit you can earn from going into a business venture.
3. Explore every detail
When considering a new business venture, it doesn’t end at just looking at how profitable the business is; as an entrepreneur, it is also your job to look into every other detail of that business before you commit to it. After deciding on what you want from a business, and how it is you want to achieve them, it is equally essential that you take this step to obviate any risk.
4. Investigate the business
This is in line with the previous point. Every entrepreneur should be able to examine all facets of a business venture before investing in it. It is your duty as the sole owner of the company to investigate the feasibility of investing into it.
5. Talk to your industry colleagues
Many people must have ventured into the same business that you are considering investing in. And these people can even be your colleagues in the same industry as you. There is a saying that talk is cheap: this is true; it may not be necessary to pay for advice, especially when it’s coming from someone you know. You may not need to make these people your friends, but sincerely and appropriately approaching them for advice would help you in reducing, or even eliminating the risks that are associated with such venture that you want to invest in.
6. Know and understand the numbers
Entrepreneurs need to be able to know and understand the value of running any business. The value of each customer is as important as the firm itself: because without the customers, there would be no business in the first place. You should try to know how regularly the customers return and the cost of getting new customers.
7. Leave nothing to chance
In business, it is critical that you leave nothing to chance. To make a success of your business, you need to take your time check everything relating to the success of the business. Do not leave the success of your business to others; it is your own business and your money that is being invested, and so you must act as the owner, trust nobody with it, only yourself. This brings us to the next section, which talks about some important steps to take to effectively apply these tactics.
Important steps to make these tactics work
To properly apply the above seven tactics to avoid risks in business, there are certain things that you, as an entrepreneur need to do.
First, you need to educate yourself. For you to succeed as an entrepreneur and to apply the above seven tips in this article, it becomes necessary that you first educate yourself on the business that you are planning to invest in. There are a lot of resource materials including books and online articles that you can read. As an entrepreneur, you are everything to your business – accountant, CEO, director, etc. So it is advisable that you read materials covering virtually every aspect of the business including planning, financing, marketing and advertising, delivery and so on.
Save more that you lose
Also, you need to learn how to keep the most of your money. Losing or spending money is very easy, unlike working to get money, which is difficult. If you finish reading this article and you are one who is extravagant when it comes to money, then the points in this article wouldn’t help you much.
Finally, and most importantly, you need to take action. It is not enough to study and read books on how to be a great man; you also need to take practical steps by applying what you have read or studied. After reading this piece, I expect you to act; don’t just read and forget about everything that you have read: it shows that you are not serious in your aim of becoming a successful entrepreneur.