4 Risks Every Entrepreneur Must Consider
Many people try to live their lives by avoiding risk. Unfortunately, that thinking is not realistic. Not taking a risk means you have a comfort zone, but most successful people will tell you that taking a chance was the jump start they needed. If you’ve had a great business idea, but your nerves keep getting in the way, take stock of your emotions. Explore the following four risks every entrepreneur needs to consider.
Loss of Guaranteed Money
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Going to a job every day guarantees you a steady paycheck. As long as you clock in the hours, you’ll be paid, right? Starting your own business doesn’t necessarily come with that luxury. Instead, it means that you’ve abandoned your guaranteed income — but, hopefully, only temporarily. You also have to think about the amount of time you’ll put into getting your business started, which means no time for a second income.
Make sure you have a plan B so that you don’t find yourself without a career and money. Keep your resume and your skills up-to-date.
Tapping Deep Into Available Funds
If you’re able to start your business solely on outside money, then you’re in a good position. However, not everyone who wants to start a business may be in that position. You may have to tap deep into available funds or use credit cards, both of which can leave you financially vulnerable.
But you can take a few steps to solicit external funding to get you started. Government grants are available for first-time business owners. The Small Business Association (SBA) has several financing options available, and angel investors are always looking to invest in new ideas.
Late Payments and No Payment Pitfalls
Another disconcerting thought is the possibility of customers making late payments or no payments. Slow-paying customers are a headache, but non-payments can lead to bankruptcy. Unexpected payment delays can have a significant impact on businesses, especially small businesses. If customers cancel their orders or place stop payments on checks, fighting chargebacks is stressful.
Resources are available to help you reduce chargebacks and contest them. Companies such as High Risk Pay can help business owners in high-risk merchant services categories set up high-risk merchant accounts. Keep electronic invoices and send out reminders before the due dates.
Possible Business Failure
Yes, successful people will tell you that they’re successful because they took a risk. But don’t let their tales fool you because not all risks are good risks. In fact, if you’re thinking about starting a business, be aware that your business may fail. The best remedy for failure is to embrace it because failure will motivate you to try again. Learn from your mistakes and strategize a different approach.
Starting a business is not a far-fetched idea, but you’ll be tested financially, physically, and mentally. However, risk shouldn’t steer you away from your dreams because many resources are available to help you get started. Instead of seeing risks as barriers, view them as obstacles that you have to get around.