Ivan talked about why people are afraid to take the necessary risk to become an entrepreneur in his post, now I’m going to talk about assessing the risks you will face when you finally decided to take that jump to becoming an entrepreneur.
1. I hate to burst your bubble, but all businesses carry some sort of risk; there is no such thing as “a safe business to get into”. There are businesses that carry minimal risk, but remember; minimal risk, minimal reward.
2. Identify potential risks and prioritize them. In whatever aspect of business your getting into, be proactive about identifying the potential risk, only a fool would sit and wait for risk to arrive. You have to be prepared, the risk is coming and you have to be prepared.
3. Where possible, take the steps to minimize the likelihood that the risk will occur. You shouldn’t open a hamburger restaurant right next to Mcdonalds, that’s a risk you can avoid.
4. Plan actions to minimize the effects of the risk if actually occurs. Alright so you know some form of risk is approaching, don’t just sit there and wait for it, take action. Imagine a scenario were you have no choice but to open this hamburger restaurant next to a Mcdonalds; you know you’re going to loose some customers to Mcdonalds, this is what you should be doing to minimize the effect of this risk; buy your produce from a local farmer weekly, that will cut cost without compromising quality, it’s probably better quality; trust me Mcdonalds is not getting produce locally. With the cost you were able to cut by going local, you can afford to craft up daily deals to attract customers, another thing Mcdonalds won’t be offering on their menu. Anyway enough with the hamburger lesson, that was just an example which can be applied to any other aspect of business.
The best time to assess your risk is before you start your business, how else are you going to know if it’s a risk worth taking or not.