Risk management is a term normally associated with the insurance industry, but you should think of it as words to live by when starting or running any new business. Your money, your time, your reputation, and even your future are at risk whenever you go into business and you must consider the risk involved in every decision you make.
Now, this is not to say you should be afraid of making decisions, or of going into your own business in the first place. What it does mean is that you need to carefully consider the good and the bad that can result from any decision. Being aware of the bad that can happen will allow you to take proper steps to lessen the likelihood that it will. One way you can minimize your risk is with proper planning and this means a business plan that includes the two most important elements, a marketing and a cash flow plan.
Make sure to begin by writing your business plan as complete as you can make it. Many people decide to just take things as they come and make decisions according to what happens to them. This is not acting, it is reacting, and it is never a good way to run anything as important as your business. Surely you have heard it said that without a plan you cannot know where you are going or how you will get there.
The first of the most important elements you need to include is a marketing plan. Your plan should cover at least the first six months in business, or ideally, the first year. Keep in mind that marketing is not just advertising. It is everything you will do to attract customers. It is advertising, it is direct mail, it is the name you call yourself, and it is the way people see you in the market. It is your reputation and it is the way you see yourself. Your marketing plan is exactly how you will make money and without it you are more than just at risk of failure, you are likely to.
The other element of your business plan you cannot live without is a plan for your cash flow. In fact, this is almost certainly the most important plan you will make and without it your business has little chance to survive. I would bet that of the hundreds of thousands of businesses that fail each year across all industries and locations, the main reason for their failure is the lack of a proper cash flow plan that is based in reality and that is followed closely and updated regularly.
Manage the risks of starting and running a new business by creating a business plan that has well thought-out marketing and a cash flow plans included and eliminate much of the risk that can put you out of business before you really even get started.
Aldar Nagy is the author of The Business Startup Resource, which offers new business profiles, ideas, advice, and other resources to help you when you are starting your own business. The Business Startup Resource can be found at: http://www.businessstartupresource.com Check back often, new business profiles are being added all the time.