Most of us started our businesses with stars in our eyes and hope in our hearts that our business is going to survive any storm. Unfortunately the risks and challenges some of us business owners had to face, resulted in slow or no growth and even the failure of our businesses. Starting and operating in a small business environment has it’s own sets of risks. Be aware of these when starting out, but also continuously throughout the life cycle and growth of your business.
1. Legal risks
* Run a legal business, according to the laws of the country and the regulations of your local municipality.
* Make sure contracts with workers are in order and up to date, according to current labour legislation.
* Be compliant with tax laws, and register yourself and your business for the relevant taxes.
* Public liability risks such as injuries on your premises, malfunctions of your products or damage to your customer’s property (eg vehicles).
2. Financial risks
* Theft in various forms, from outsiders or sometimes even more disastrous, your own workers.
* Stiff competition from bigger role players and businesses.
* Biting off more than you can chew – grow your business in small steps, according to risks you can comfortably take.
* Bad debts due to late or no payments from your customers.
* Rental agreements going sour, forcing you to move your business to different premises.
3. Operational risks
* Breakdown of machinery and equipment.
* Natural disasters such as fires or storms.
* Lack of appropriate administrative procedures and systems.
* Deficient planning and control of production processes, leading to late and incorrect job deliveries.
* Issues relating to internet connectivity, internet fraud and scams.
* Consequences arising from lack of innovation in your business.
4. Human and personal risks
* High staff turnover or loss of one of your key staff members, especially when they have an unique set of skills.
* Accidents and death happens – it could be you, someone in your family, or one of your staff members.
* Working too hard and missing out on family life, or even losing your family due to estranged relationships.
Although many of these risks are just as relevant in big businesses, smaller businesses generally have far less resources. Build up a network of reliable suppliers, legal advisers, financial consultants, friends and mentors to aid you through difficult times. The above list is not meant to scare you off from starting your business, but to assist you. Rather learn through the mistakes of others than through your own. Good luck and success with the running of your business – and remember to have fun!
Author: Miemie Theron @ Rietmark www.rietmark.co.za