For many small businesses, the risks can be so great that they’re not worth taking. But for those who are willing to take a chance and don’t mind risking it all, there are plenty of rewards waiting. When an incident expands into a crisis, you will be motivated to do all that can be done to prevent it. There are always items to take off of the checklist regardless of how long it is. The list does not have to be completed in order.
If you’re planning to start your own business, there are certain risks that you need to be aware of beforehand. Here is a list of the 15 biggest potential risks for small businesses.
1. Competition –
There will always be competition for any type of product or service, no matter how niche it might be. This means that you may not have a competitive advantage, and the market may already be saturated with other options. One way to reduce this risk is to target something in high demand or cater your product or service towards a specific demographic.
2. Poor management –
It’s always best to make sure you have a good team around you with the necessary experience and knowledge to successfully manage your business. Working alone may save you some money, but more often than not, it will only drag your progress down.
3. Wrong location –
Choosing the wrong location for your business can be a death sentence, because if people are unable to find you, they won’t be able to make a purchase… which means no revenue! This is why it’s important to research how competitive the market already is in your region and where the competition is located so that you can establish yourself as an alternative.
4. Lack of product or service variety –
If you are running a business that offers only one type of product or service, then what happens if you’re unable to sell all of them? That doesn’t mean that it can’t be successful. For example, the number one selling product on Amazon.com is the company’s Kindle e-reader, which outsells all other products combined by a wide margin. It is estimated that a new book is published every 25 seconds.
5. Lack of capital –
In order to be successful in any business, you are going to need money. If you’re starting out without a large amount of capital, it will be difficult for you to get the business off the ground. There are ways that you can keep your costs down, but if you don’t have at least some money to spare, then it’s time to reevaluate your situation before doing any more damage.
6. Hiring employees –
Hiring too early can cause many problems including paying too much in taxes, increasing insurance premiums and medical costs, and having little control over the work that they do. If you’re going to hire people, wait until you have your business firmly established, and then you can bring on the employees.
7. Lack of time –
In order for any business to be successful, it takes time to properly advertise and market your product or service. If you fail to spend enough time working on this aspect of your business, then you may never find yourself with a large amount of revenue. Even if you can’t devote all of your time to it, make sure that this is one of the most important items on your checklist.
8. No money –
Maybe you have money at the moment, but that won’t last forever. You need to make sure your business is profitable or else you will surely go broke. Even if you already have a lot of revenue, if your costs are higher than what’s being made, then you just might be in trouble!
9. Bad reputation –
Once customers have been attracted to your location or product and made an initial purchase, it’s important that they remain loyal to your company. The only way this can be done is if they would continue purchasing from you even if everything changed around them. Instead of spending so much time on trying to attract new customers , make sure you pay attention to the quality of your products and services.
10. Poor management –
If you’re not well-managed, then something as simple as a problem with a supplier could end up being something that could destroy your business. If you think about it, this is actually a risk that applies to any business no matter its size or budget.
11. Lack of money –
Once your business stops being profitable, then it will be difficult for you to continue. Even if you aren’t making a lot of money, a small amount will still help you cover expenses and keep your business running.
12. Poor website design –
One of the best ways to attract customers is to have an attractive, well-designed website. This will allow people to easily find what they need and provide direct links back to your site which will improve its search engine optimization (SEO). If possible, you should make sure that it’s hosted on a secure server with an SSL certificate so that people can feel safe when purchasing from you.
13. Poor choice of location –
If you’re going to be running a business, then it’s obvious that you have to have a place where people can visit. If they can’t find you, then they won’t be able to make any purchases! Location is something that isn’t always up to your discretion, but it is one of the most important factors when setting up your business. Especially if you plan to sell online, make sure that it’s accessible and easy for people to find.
14. Political or economic instability –
It’s important to make sure that the country your business is in has a stable economy and political situation before starting any kind of long-term project. Even if it’s not a problem right now, a change in the economy or politics could cause your business to fail. If you are feeling especially uncertain, it might be time to look into relocating.
15. Inappropriate management –
If you have bad management, then they can take away the very thing that you’ve worked so hard for and you will lose everything all at once. This is why it’s important to hire someone that has experience working with entrepreneurs because they know what to do even if things aren’t going well.
