No, we aren’t talking about a movie from the 1980s. We are talking about being risky in business. Should you take risks in business? Hell yeh. We just need to make sure that they are calculated risks.
You will never be able to protect yourself from risks in business. Sure, you can take out business insurance, and you can protect yourself from fire, flood and theft. You can even insure against a pandemic. But you cannot know all the risks and some insurance costs are so prohibitive as to become bad risks to take.
Calculated Risk – Action VS Non-Action
So, what is the definition of a calculated risk? It is the chance of failure where the probability has been estimated to be less than the chance of success. Many years ago, a construction business estimated the cost of failure to use a crane during high winds to complete a project against the cost of injury or loss of life. They took the wrong risk by using the crane. There was a life lost due to the use of the crane. This was the actual case that created the charge of corporate manslaughter.
Businesses take risks every day. Starting a new business is a risk. Before starting a new business, you assess as many of the potential risks as possible. Weigh that up against the possibility of success, and if success outweighs the risk, you have a new business.
Employing staff can be risky. The reason some companies use employment consultants to find new staff is to mitigate the risk. It is expensive to employ staff, there is training, and time involved, and if you have made a mistake in the staff you choose, it is back to the drawing board. But it is a necessary investment of time and money, in the belief that they will be able to generate income for the business.
Innovator or Imitator
Creating new concepts, new products and services can be risky. Is there a need for the product or service? How will you get the new ideas out to your prospective clients? Is it affordable? Can it be copied? These are all areas that you need to address before investing time and money into a new project. But there is also a risk in not creating new concepts, keeping ahead of your competitors, and giving clients a reason to utilise your service rather than your competitors. Are you an innovator or an imitator?
Think about what you would want as a customer. Would you prefer to get an original or a knockoff? Can you afford not to keep ahead of your competitors?
Is your website secured against hackers? Do you have an SSL certificate? Are you keeping up to date with website best practices? Do you have a team you can call to help you if your website encounters some problems? Services from digital agencies and web design companies can help with these important issues. All websites change and evolve over time, and so too should your security plan.
But not having a website is a risk you can’t take in business, because all your competitors have one and are scooping up any business you could be claiming.
Does your website reflect all the services and products that you offer? Your website must be easy to navigate, user friendly and able to provide the information a person needs in an instant. An effective website is a vital tool for the success of your business.
Compliance – Is the Risk Worth It?
You know the reasons you started your business. You are out there every day ensuring that the business is successful. But don’t forget about compliance. There are laws and regulations that govern how we work, the safety of our staff and our products, as well as taxation requirements. Omitting accurate reporting to regulatory bodies will be at your peril and is a risk that isn’t worth taking.
There are risks everywhere you turn. But some risks are able to be insured against. Property damage, theft, flood and fire, automotive insurance. These are risks that we all know we must take out and keep on top of. But what about product liability? You must have product liability insurance to provide any goods or services to government departments, but it is vital to have this insurance to protect you from claims against your products, your staff and yourself. It is a litigious society we live in, and product liability insurance goes a long way to protect us.
Are you on top of the marketplace? Are you constantly keeping yourself abreast of change in your industry? You need to make it a regular duty to ensure you are aware of any changes in your industry. If you are too late in adapting to the marketplace you will be lost in the crowd.
Ensure that your staff is kept up to date with any marketplace changes. When you meet with your staff you need to ensure that you are communicating with each other as to how the marketplace is holding up, what areas of concern your clients have and ways that you can be constantly improving your offerings to your clients.
Constantly and consistently be asking your clients what else they would like. The question that earned more money for a company than any other question was “Would you like fries with that?” You cannot afford to employ order takers. They need to be order makers. Getting a client is hard enough. Keeping them is even harder. But providing for all their needs from you is increasing your sales, and better yet, is decreasing your opposition’s sales.
Understand Your Marketplace
Keeping up with best practices in business is important but time consuming. As a small business, you need to know what’s changing in your industry and always be aware of any security risks due to scammers. Keep on top of competitors entering the market and identify ways they might take a slice of your own business. Adapt quickly. Those who adapt in small business, survive. It’s those who don’t move forward with the times that end up squeezed out and replaced by a newer, more relevant business.