If you’re thinking of starting a business in Consett, it’s important to understand that it comes with some level of risk.
Successfully building a business over months and years, more often than not, means being able to manage that risk. The risks we’re talking about come in many forms, and, if they’re to be grappled with, it pays to understand them in advance.
Your business will need to be able to handle money. Depending on the industry you’re operating in, you might find that you’re exposed to systemic financial risk. Perhaps there might be a general economic downturn, which persuades your customers to shop elsewhere. You might also face acute financial risk, as a result of a single one-off event.
The best way to stem financial risk is to spread your investments over a diverse portfolio. This is a way of saying: don’t put all of your eggs in one basket.
At the start of your journey in any given business, you’ll want a clear idea of what you aim to achieve, and how you’ll be achieving it. This means putting together a business plan. This should be an ongoing effort, which adapts to the challenges you face in different market conditions.
When you’re strategising, it’s important to be aware of your state of mind. After all, you risk making poor decisions if you’re unfocused or otherwise distracted. The same applies to all of your employees. According to Mind, the mental health charity, around seventy million working days are lost every year due to mental health problems. This, therefore, might be considered a lesser-known form of risk.
Certain businesses live and die on their reputations. If your brand’s image is tarnished, then you might suffer a loss of reputation which harms your income in the long term. For example, you might become embroiled in a scandal that affects the public perception of you and your operations. This is where a chartered attorney specialising in trade mark and reputation, like Kirsten Doherty of Withers LLP, can come in very useful.
Getting into legal trouble can harm more than your reputation. If a member of the public is harmed as a result of your business activities, then you could find yourself vulnerable to legal action. Again, the best way to deal with this is proactive. Have a lawyer examine your practices, and insure yourself against damaging claims.
Naturally, you’ll want to keep your premises secure. This might mean installing high fences, user access control, and security cameras. But we might also pay special attention to online threats like phishing. Cybercrime is a growing problem worldwide, and if your business doesn’t take it seriously, you could be exposed to substantial risk.
If your operations are interrupted for any reason, then you’ll be unable to make any income – but your costs may remain fixed and inescapable. This might mean inhospitable weather preventing your staff from reaching the office, or it might mean your supply chains being disrupted.
Here, you’ll want to perform what’s called a PESTLE analysis. This is an acronym that stands for Political, Economic, Social, Technological, Legal, and Environmental. It’s a framework designed to help you ask the right questions, identify the relevant risks, and take action to deal with them.