Andalucia Steve

...living the dream

There are four main risk areas when setting up a new business.

Most new businesses fail. Google the stats as they are in your country but it's a big number - 90%  of businesses starting in 2013 won't be here in 2018.

The fact is that new business startups are vulnerable risky ventures. If you're starting up a new business it helps to do a risk assessment as part of your business plan.

Risk can be divided into four main areas, product risk, financial risk, team risk and market risk.

The trick is to realise that the first three are much more predictable and controlable than the latter. Of the four types of risk, market risk is more volatile.

Financial risk can be managed with budegeting, team risk mitigated with flexible empoyment policy, even product risk to a great extent minimised with good R&D and QC. The market knows no master, so it's dynamics will always be the one thing you can't control.

The logical thing to do then is to test the market as soon as you can before you spend much on product, team or borrow finance. Use models and test extensively before scaling up your product offering so you can determine the size, shape and demand of the market place as early as you can.

Gravatar #Andalucia evangelist, social marketer, musician, guitar technician, reformed estate agent, recovering programmer, political disruptor - yup that's me!
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