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

There are many risks that are associated with running an enterprise, but the bulk of the risk is centered majorly at the start-up phase. This is why it has been observed that what happens to an enterprise at the initial stage will determine the future of the business. We took a look at how to effectively manage risks, as an entrepreneur, during the starting phase of the enterprise. We have established the fact that you need to examine the potential outcome of a decision before you take them, from our last episode. We looked at the need for a plan B and the importance of continuous learning. Here, we shall conclude with someone more tips on how to manage start-up risks.

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1. Understand the benefits of taking risks

The truth is that you cannot manage risk by avoiding the risk itself. Avoiding risks will also predispose you to a greater and fiercer risk. So you should understand that risks have benefits because they have opportunities in them. As an entrepreneur, you need to make a connection between opportunities and risks, this will make you to welcome risks differently. So instead of trying to avoid taking risks, you should rather build capacity to take risks. However, you should be selective of risks you take. This is because not all risks may be worthwhile.

It is worthy to note that there are also some great lessons that can only be learnt after taking certain risks. Also there are achievements that can never be attained until risks are taken. For example, when the the first aircraft was created by the Wright brothers, one of them took the risk to fly it even though he did not know the outcome or the result of the flight. But after the successful flight, it marked the revolution in the aviation industry. Imagine if after building it and no one took the risk of testing it, their invention would have sunk with them, and the world would not have witnessed something beautiful.

2. Avoid the feeling of self-satisfaction

Self-satisfaction or complacency is one of the banes of any start-up business. If you are too comfortable with where you are, this may limit your propensity to take risks and as such, it will also limit your growth. The truth is, if your business does not present any risk at all, that is, if it has zero risk, then you should be very worried. It is worthy to note that a business enterprise cannot stretch if it does not take risks. You should also know that achieving success is also not an excuse to stop taking risks. Even if you have achieved a milestone, you still need to stretch yourself the more. This is because success needs to be sustained so as to prevent it from obsoletion.

For your company to keep growing, you have to set a precedence for it and that includes continuous taking of steps and making of moves. The truth is that the world has not stopped evolving and as such, the course for new trends are being charted daily, which also presents with a new level of risk. The truth is that there are risks that you need to take to prevent a far weightier risk, these are the ones you need to be more concerned about first. In running your business, you should try not to be too comfortable in the same spot, because that alone is an incredibly fierce risks on it's own. Just like we established in our first point, there are some risks you can manage or even avoid by taking some other risks.

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3. Prioritise and group the risk accordingly

One of the most important steps towards the management of risks as an entrepreneur is to group risks and prioritise them which will also enable you to know their level or severity, threat, etc. For example, know the risks that have a high proclivity to occur, know the ones that have minimal chances of occuring, know the ones that are avoidable. For example, your actions should be to prevent the risks with an increased threat level because this may hamper the future of your enterprise.

To be able to know the categories that each potential risk falls into, you should first examine your enterprise critically, relate it with your achievements so far, and then make extrapolations (future projections) of your business. This will give you a glimpse of what to expect in terms of risk, then you can prevent the critical ones. For example, if you are into the processing of edibles, you should know that you are to pay and get a license from the Food Administrators. This is because, by the time the company grows and they notice you do not have the required licence, you will be faced with a heavy fine that may affect your business negatively. But of course, that kind of risks would have been prevented if you have given it a top priority at the start-up phase.

Thanks for reading