Starting your own start up company is a huge gamble on your part, no doubt about it! You may think that you have a solid business plan and a product that will be a success, but nothing guarantees that you will actually be a success!
Assessing the risks before you start your company is important, so consider the following risks to help you determine if you have what it takes to start a company that will succeed:
Financial Risks – Do you know how much you need to invest in your company to make it work? If you’ve sat down and considered all of the cash you’ll need to cover the cost of the products you’re going to buy, hiring the workers you need to make your company work, and the overhead you’ll need to have in order to cover costs, you’ll find that starting your own company can be a huge endeavor!
If you don’t have the money to be an entrepreneur, can you write up a business plan that will be attractive to investors and entrepreneurs like Morgan Chu, Kevin O’Leary, or Barbara Corcoran?
Picture yourself going onto a TV show like Dragon’s Den or Shark Tank, and examine the financial risk of your company. Does your financial plan cover everything your business needs? The financial risks are huge, so make sure to be prepared for anything.
Competitive Risks – You may have a product that is guaranteed to be a hot-ticket item, but what happens if other companies have the same item? Do you have what it takes to offer your product at a lower price than massive corporations like Wal-Mart, Toys R Us, or General Electric can?
Is there something that makes your product stand out from the competition? Evaluate the competition for the market you’re trying to break into, as one of your biggest risks is that someone else will have a better, cheaper product that will make your product redundant or unattractive.
Market Risks – Is there really a market for the product you’re trying to sell or the service you’re offering? One huge risk that you take is that your product will fail, something that is not uncommon.
There is very little that separates failed products from the successful ones, and demand plays a huge factor in the success of a product or service. Do your research to find out if you really have a product for which there is demand!
Networking Opportunities – Do you have any way to network with others to start your business, or are you just going to break into the market cold? Cold calling and walk-in sales are only so effective, but networking is the key to your success!
If you want to really be effective as a company, you’re going to have to find ways to reach out and sell yourself via your network. Don’t have a network? Do you have what it takes to create a network for your company?
These are serious risks, and they can cause your business to fail. Are you prepared for the risks you’ll face as you start your start up?