How to manage risk when setting up a business

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Running your own business – it’s the dream for many people out there. For most, it will remain just that – a dream to cling to when things aren’t going so well at work. But if you do decide to take the plunge, where do you start, and how do you make sure you minimise the risks that all new businesses face in the crucial early stages?

Market research

All businesses need customers and clients and attracting them is at the heart of every business. However, you need to know that those potential customers are out there to begin with and this is where market research comes into play. Depending on your kind of business, this could be as straightforward as counting how many people walk past potential premises in order to measure footfall.

Alternatively, if you’re setting up an online business, you can use tools such as Google Keywords to look at what your potential customers are searching for. If no one out there is searching for what you’re going to sell then you might wish to rethink your strategy. These kind of SEO tools can also help you tailor your website effectively to make sure you show up in search results pages when people are looking for your product or service.

Competitive intelligence

With the internet now firmly established and providing more freely available information than ever before, there is no excuse for not doing thorough research before embarking on a business project. If you have established that there is a customer base, you also need to look at your potential competitors who may already be servicing this base. All companies registered in the UK have to provide details to Companies House and these can be a mine of useful information when embarking on competitive intelligence.

There are free online services that allow you to search company house records and these will give you a good idea of the financial shape of potential competitors and who is in charge. If companies are going well, it means there is a strong market for the service but you’ll have to work hard to convince competitors’ customers that you can offer a better one. Similarly, if a company is not doing well, you will need to decide whether that is to do with the market or if the company is just not running its business effectively.

Help and support

If, having done your research, you are still confident in your idea, make sure you seek all the help you can get. In these tough economic times, the government is very keen on individuals starting new businesses that can potentially lead to more employment. Look out for start-up grants, loans and even mentoring opportunities from the likes of the UK Government or geographically-specific agencies such as Scottish Enterprise, which offers free advice and workshops for those setting up their own business.

Starting a business is tough and many do fail. However, with the right intelligent approach, the correct research and the ability to ask for help when appropriate, you can minimise the risk you expose yourself to while maximising your chances of turning your idea into a success story.

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2 Responses to How to manage risk when setting up a business

  1. I think having a business idea is great, many people have them but if one doesn’t do any research they may learn the hard way if it doesn’t go as planned.
    Canadian Budget Binder recently posted..May 2013 Net Worth Update: Up And Down The Ladder (+1.77%)My Profile

  2. Mark Ross says:

    Research and more research, it’s really important and helpful on your part. A well-prepared business plan will go a long way. I also agree with the other two, competitive intelligence, and some help and support.
    Mark Ross recently posted..5 Of The Best Business Ideas To Start This School YearMy Profile

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