Mitigating risk: it's all in the game of entrepreneurism
It’s no secret that risk is inherently part of being an entrepreneur; there is potential threat involved with every decision made along the journey! The key to navigating your way through the murky waters is knowing what to plan for and applying the appropriate sense of urgency to each issue.
Let’s talk through how to navigate those planned and unforeseen business hurdles.
But first it’s important to understand that not all risk poses the same degree of threat. While that may seem like a no-brainer, knowing what risks are potentially most damaging will allow you to better prepare and mitigate the greater threats. While you can’t dodge all bullets or know exactly what’s coming, you can be equipped to protect yourself from a cash flow crunch or going out of business with a bit of planning.
There are the inevitable risks that all entrepreneurs are bound to face; financial, longevity, inflation. Assessing the degree of these risks should become part of an annual routine. That means projecting and reevaluating year after year growth expectations and worst case scenarios. Chalking this planning up to annual eases your mind from day to day stressors; Planning for the future plays a larger role in the success of the entrepreneur, and overall happiness factor, but is not something that one should dwell on daily.
Start by looking at and planning for the employment risks in your business. What would be the risk if one of your key employees left the business unexpectedly? How long would it take you to recover from the loss?
Then consider planning for operational risks. What cybersecurity protocols can you prepare for with the purchase of a new software or technology firm partner within the next three months?
There are also the unplanned risks emerging from our personal lives that can pop up at unexpected moments; marriage, children, divorce, relocating. Though you may have thoughtfully planned out the grand proposal and were anticipating the marriage, were you expecting how it was going to affect the business? Or the amount of time you can dedicate to work versus spending at home with your new spouse?
Figuring out how each of these new pieces of the puzzle fit together is half the battle. Once you set a rhythm you need to decide how involved you want these outside factors to be in your professional world. How much “business talk” do you bring to the dinner table? Does your partner want to know about the state of the company daily? Weekly? Will your children work in the business and/or one day become your successors?
Stuck on how to integrate the business with your personal life? BALANCE IS OUT. INTEGRATION IS IN.
Don’t waste unnecessary stress and energy planning for every potential threat that might come your way, because the nature of risk is that it can show up unannounced, or not at all. The most important piece is to be aware of potential threats and recognize that new risks emerge as your business evolves.
What is a hurdle you have experienced in your business journey that you could have better prepared for with some projections? Share with us!