How To Manage The Risks In A Start-up [Part 1]

As an entrepreneur, starting a new business obviously involves some forms of risks which you must take. No wonder it is often being said that "success belongs to the people that are willing to take risks." However, risks should not be taken blindly, otherwise it may become futile and counterproductive. Here, we shall take a look at how an entrepreneur or a business owner can effectively manage risks while starting up their enterprises, so that they will not truncate the future of their business.

1. Weigh the choices you want to make properly

Before you make a decision as an entrepreneur, you need to weigh the potential effects of the decision and know if it will be in the best interest of your enterprise in the long run. In order to do this, it is alway advisable that an entrepreneur go with the choice or decision that, even if it fails, the loss that is incurred will be limited or may be of a certain minimal value. For example, to invest financially, an entrepreneur should not put in his entire funds into certain investment but learn to distribute it evenly or at least, use a part of it so that it will not be the case of "putting one's egg inside the same basket."

More so, when presented with choices to make, even though you are to make the one that will yield positively in the future, you should also choose the one that, if it does not work, will not crash your business. There are some choices that only their positive turnout is beneficial but if they turn negatively, it will be catastrophic. This kind of choices should be weighed properly before investing. For example, imagine an investor using his entire funds to invest in a crypto ICO. If the ICO succeeds, he will profit massively, but if things turn negatively, he will be rekt catastrophically because he had sunk in everything in the ICO. So you see, you need to weigh both sides of an option before you make a decision.

2. Have a plan B

As an entrepreneur, you do not expect every of your moves or decisions to yield positively even though you should always hope for the best. However, in the event that they do not produce as required, you should always have an alternate plan to fall back on. You will agree with me that there are many uncertainties surrounding investment and as such, one should not just base the outcome of their choices on mere chance, or to always hope for the best without making plans for the unforseen contingencies. I remember what a friend once said a few year back, he said:

Always hope for the best, but be prepared for the worse.

As a start-up entrepreneur, you should always have a secondary plan at hand whenever you take a decision. The truth is that there are things you can make to happen, and there are things that you cannot prevent from happening, but you need wisdom to be able to know how to distinguish between both of them. So as you are trying to "make things happen" in your enterprise, you should also brace up for the things that you cannot prevent from happening. It does not stop at being a risk taker, you should also learn to manage the outcome of the risks, both the positive side and negative sides.

3. Keep learning

Knowledge is power

The above statement has been said often and I see truism in it. With the more knowledge you get, you will be more exposed on the various ways to handle risks. More so, there are some risks that you may even avoid because they may not be worth it, but you can only know about them if you have acquired knowledge relating to them. Before starting a particular business, you have a need to extensively gather the relevant information about that particular business so as not to take unwise decisions that may put the entire business at a risk of crashing.

There are many wrong decisions that can easily be avoided if one has increased in knowledge. One thing to keep improving on is your knowledge-base. It is worthy to note that the more you know, the less wrong decisions you are likely to make. There is a reason entrepreneurs go for training, seminars, crash course, etc, - to be able to acquire the relevant knowledge on how to effectively run their business and manage risks. This also brought to memory what a friend once said in relation to learning and knowledge, he said:

If you do not learn to stand for something, you may likely fall for anything

Thanks for reading