As an entrepreneur, risks are unavoidable. You can also say that these are the steps of a ladder which leads you to success.
A new venture requires not only funds but also pure dedication and commitment with a clear vision of your goals. It sounds really negative when we see that 50% of startups fail in their very first 5 years but in spite of these numbers, there are 400 million entrepreneurs worldwide.
Many of us want to start our business and some of us don’t know what it will take to start a business, we wonder,
- What is the percentage of new business failure?
- What are the reasons for entrepreneurs failure?
- What is the average age, salary, and percentage of successful entrepreneurs?
So if you are too scared to handle risk, here are my best tips to use risk for growth of your business:
1- Open opportunities – Being first to identify open opportunity, can bring heavy returns. But entering new space can’t give you a guarantee that your efforts will pay you off. Keep your eyes open on the areas that your competitors might be leaving. Explore the reasons behind why that space is untouched, and see if you can provide a solution that resolves those needs.
2- Not all the time you will win– It is ok to take the risk as an entrepreneur, but those risks won’t pay you all the time. The key is to calculate your risks carefully, analyze your goals and knowing that you have some chances to fail. It is advisable to make wise choices in risks you are taking on. Work on a backup plan if things will not work according to your expectations. Learn the lessons from your failure and use that experience while taking your next move.
3- Stay Dynamic– When you push your business, it becomes comfortable to stay with that processor strategy which works for you. But with time, it will become outdated. Following similar strategies over and over will diminish your returns. Stay dynamic in the growing stage of your business and move with the shifting trends. Experimenting new things and flowing with the shifting trends can help you bring fruitful results for your business.
4- Right team– A right team is the pillars of a successful organization. When you have skilled people supporting the same mission is the key to success. But there is a risk if you failed to hire the right employees or partners that turns out to be stumbling block to achieve your goals. You can’t grow your business alone, so yes this risk is worth taking.
Entrepreneurs are known as risk-takers, who carefully take steps to reach their goals by finding ways to reduce the risk as they move forward with their business.
Types of risks that entrepreneurs should take:
Market Risk– It refers to the market fluctuation also known as systematic risk. To take control over this risk, research consumer trends, interests, continuously test the market for customer preferences, also test different products and services by promoting and figuring out which will sell better during the market downturn.
Competitive Risk- Competitive risk is defined as the risk of losses due to the poor product, pricing, and marketing strategy businesses take on, overlooking their competitors. An entrepreneur can minimize this risk by conducting a SWOT analysis and create effective strategies to fix these issues.
Credibility Risk– Entrepreneurs faces this risk when they launch a new product or services. The credibility of brands helps in getting customers for new product or services. It has been reported that 59% of consumers prefer to buy a new product from brands they are familiar with and 21% of consumers buy a new product from the brands they like.
To overcome this situation build a professional online presence with your business website and social media pages, offer quality product/services, get positive reviews by customers and avoid questionable deals.
Technology risk– Losing revenue due to the failure of technology, for example, your e-commerce website crashed and your customer is moving towards your competitors’ leads to a decrease in revenues and regular customers. Do regular maintenance and security checks to avoid any technology failure and invest in the latest, affordable and reliable technology.
Financial Risk– This one is the major risk and challenge for business owners all over the world. Also, this is one of the reasons for the majority of startups fail. If you don’t have such level of knowledge to maintain accounts, prefer to hire accountants who are capable enough to detect fraudulent transactions, maintain positive cash flow, generate accurate reports and most importantly it will give such information which helps you in investment at the right time to grow business.
Always remember big brands like Amazon, Microsoft was also a startup began their journey in a single room. They took risks and did some right things which consumers really need and today we are all dependent on these business giants. Do your research and analyses, share your thoughts with your family and friends because these are your first customers and honest reviewers.