There’s a lot of risk associated with small business and ventures that only the young and brave entrepreneurs are willing to take on. Well, no business ever got to where it wanted to be, by not taking on risk. The entire challenge of starting your own business is a risk in itself. There’s not much you can do to avoid risk, but you can definitely plan for it. Planning for the usual risks that everybody faces is something you have to do, but even more so the risks that are specifically for your particular industry and field of work. You will face the similar risks any technology business will when you’re a technology based company. However you will face different risks as a smartphone company than if you were a television making company. These fine nuances are the hurdles that will often catch out the small business owner. However, if you plan and make decisions based on a business plan that understands the landscape for the nesty 3 to 5 years, you will be in good stead to easily jump over those hurdles.
Small and medium sized businesses are much more prone to being attacked by cybercriminals than larger businesses. The simple fact is, that much like on the Serengeti plains the predators will always go after the young. However, that’s where the similarities have to stop, because just because you’re young doesn’t mean you are weaker than the larger businesses around you. There are however some things you need to take into consideration, when planning for the kinds of risks that you will be facing.
- Do not buy your own servers and keep them in your own office, you should buy them from a dedicated specialist company.
- Make sure all your work is being stored on a cloud system, where you can keep multiple copies, store them on multiple servers and different accounts.
- Firewalls and data encryption are going to be your steel guardians in the online world where cybercriminals are constantly trying to crack the codes of your servers and data.
- Backup your data threefold. One should be in the main servers, then another copy on backup servers. Finally, you need to try to have a physical copy of your latest work so buy a physical hard drive and keep things updated.
All of these things are going to help you plan for any eventual attack. Small and medium sized enterprises are constantly under attack all around the world. A staggering figure is the 32% of SME businesses were attacked just last year. That is millions of businesses around the world and millions of business owners that have to recoup, rebuild and regroup to get back to where they were before the attack. You can lose an incredible amount of money trying to fix the problem, keep customers and clients happy and also regain all that knowledge that was either corrupted or stolen. Avoid these things like the plague and jump over this cybercrime hurdle.
There are countless ways for how a small business can be stopped from expanding. You might have revenue stream issues, profit margins that are not attainable, global economic disasters, natural disasters, hackers getting into your system, a competitor taking a large portion of your customers and a lack of internal growth as well. That last one, is all about employees. Employees that are not continuing to improve, advance their skills, learn more about their craft and industry, learn new techniques and expand their level of experience can bring a company down or stop it from growing. Hence why one of the biggest and most difficult hurdles for any small business owner is the challenge of hiring specialist employees. Employee salaries are also in the top 5 expenses of any business, so why not take the time to make a wise choice of who you hire?
But that’s exactly where the troubles lie. If you have never hired someone before, you don’t know much about the industry you’re in and you don’t have an accurate plan on what you want and where you want to go with your business, how on earth can you hire the best people? This is why small businesses will look toward a professional hiring company. You just speak to this entity, explain what kind of business you are and the types of skills you require. They will do the legwork and match resumes and profiles with the job descriptions you give them. Alternatively, you can also go to many small business events or industry events, so you can mingle and meet relevant professionals that are looking for a new role.
As ever, where there is a lot of money involved there is always a line of shady characters. There’s a scandal ongoing right now with Elizabeth Holmes, who scammed billions of dollars from investors, clients, customers and various industry professionals. These kinds of things happen on the large scale and the small scale so don’t think that liars and cheats don’t exist in your industry and business size. One of the things you need to look out for is clients that don’t pay for their products and services up front. This can lead to a small business literally chasing up the CEO of that business, trying to get paid for the work you gave them.
Using a service that offers Invoice finance is a great way to get peace of mind. They will firstly, look over your invoice and accept anything that is up to around £40,000. Then you will be paid 90% of the total invoice. The company will then do the chasing on your behalf and get all the outstanding money paid to you. You get the remaining 10% of the invoice minus the fees that are required for the service provided to collect. Rather than chasing up the client and wasting valuable time during the day and also possibly ruining your reputation, you can hand over this embarrassing and angering situation. You get all the money you were owed and learn a valuable lesson to not trust that client again.
No two financial quarters are the same and most definitely, no two business years are the same either. There is a dilemma that you have to confront in your first few years of existing as a business. Do you want to grow quickly or do you want to take it steady as she goes? Of course most of us want the former, but based on your revenue growth you cannot take this so lightly. You wouldn’t believe just how much large businesses have tucked away and continue to tuck away every single financial quarter. They are saving up for not just a rainy day but a full torrential storm on the horizon. The last big economic shock was in 2007. However recently there has been chatter and notable slow down around the global markets.
The plain and simple truth of the matter is that there could be a recession looming in the next year. So in this regard, your business needs to save cold hard cash for events you cannot predict. But don’t just save up money in your business’ bank account. Invest the money you save into hard assets such as property. Investing in other businesses is also a good idea as many businesses that know the ins and outs of their own industry will peg a piece of their revenue onto the strongest hoping to weather the incoming storm. Smaller smartphone companies are known to buy the stocks of the big two i.e. Samsung and Apple. It’s also a good strategy to invest in blue chip index funds, as you can spread the hurt out and be able to make a gain equal or greater to that of a loss during economic downturns.
Burnout is very real
Many small business leaders will champion any kind of stress they go through during the first couple of years. But even when business is going good, the stress factor just becomes too much for some. Burnout is a very real and dangerous thing, so as a business leader and owner, you must take the time to enjoy your growth and success. Holidays for employees are just as important and should be just as regular as holidays you take for yourself as well.
Burnout is very real in employees too, so try to engage with your staff with the aim of finding out who is at the end of their tether with regards to overworking. Speak with your managers once a month and see what kind of activities can be done to make working days go smoother and quicker.
The risks of starting and running a small business are great. But the rewards will always outweigh any negatives if you have planned properly to jump over these hurdles. Some of them are more predictable than others while others are simply event activated like recessions. In these cases, having a good eye for accounting and investment really helps.