Doing business is a continuous risk. We take risks each day when we do business. Every time we lend money to a borrower, do business on advance payments or invest money in a new business, we take risks. Risks are a part and parcel of everyday business. So much so that we sometimes tend to ignore these risks altogether. This is fine as long as these risks do not manifest into adverse situations. But we cannot ignore the fact that these risks that we completely ignore most of the time can harm our business in a big way. Risks of a company needs to be monitored diligently. They should either be mitigated, transferred, accepted or avoided. If a risk is to be mitigated, one should have the proper contingency plans and mitigation plans in place. Here are some risks that any business owner should not take.
Blind venturesBlind ventures are those ventures that you get yourself into without doing proper feasibility studies. Many companies are well known for diving head first into these blind ventures. These are not only a risk but also can backfire on the rest of the business too. For example, just because you read about Hong Kong franchise operation it does not make you an expert on it. You will firstly need to analyze and see if it is the right direction for your business. Many people might try to push in with their ideas just because there is personal benefit in them. But all ventures for which proper feasibilities are not done should be avoided at all costs.
Not being process oriented Just like trying to venture out into Hong Kong franchise operation is a bad idea, depending on one person’s opinion to make a decision with regards to it is also a bad idea. This is because the practice of depending on a single person’s opinion to make a decision indicates the lack of well-defined processes in your business. A business of today requires a process based approach more than ever. Instead of depending on the people, a company should always depend on its processes to make decision for them. This way, even if people leave the company, the company will be independent enough to run on its own.
Stagnating Stagnating in one place without branching out into different and new business areas is another risk that any company of today should not take. This means that the minute competitors come into the picture, your company is going to be thrown out of the picture. Therefore various strategies should be thought of to escape from this risk area.