No matter how much you plan when it comes to setting up a start-up, there are always scenarios where your business could be at risk. The first year of the business is the most important and is often the tell-tale sign of whether or not the business is likely to be successful. Here, we’re taking a closer look at the business risks your start-up needs to be aware of, prior to setting up.
One of the biggest and most obvious risks for a start-up is maintaining strong finances throughout the first year of business. While it is unlikely that your business will breakeven in the first year, due to the extensive amount of costs when initially starting up, making sure that you are able to cope with the additional pressures on the financial side of your business is important. It is important that you protect your business from any additional financial risk too, such as loss of income, or the possibility of legal fees due to an accident caused by your business’ activities.
This is especially important for businesses who work around the public, where health and safety can be compromised due to the work you’re carrying out. Each business is able to take out a specific type of insurance, most suitable for them. For example, a cleaning company would be able to take out specific cleaner insurance, and an electrician would be able to take out unique tradesman insurance best suited for them. Make sure you are prepared for every scenario in order to help minimise business risk.
No matter what you’re looking to sell, whether a service or a product, the market risk is one of the biggest considerations. If the market is slowing down and people aren’t purchasing your products, then you will need to ensure that you have some form of a back up plan. Make sure you have thoroughly researched all of your market opportunities prior to setting up, as this will provide you with a gateway into seamless transactions. Even if your initial customers are consistently purchasing from you, keeping an eye on upcoming competitors will help to ensure that you maintain your slice of the market share.
Alongside the possibility of having to deal with a member of the public making a legal claim against your business, there are a number of other rules and regulations that you will need to take into consideration. These will vary from industry to industry, with construction businesses, all companies will have to register under the Construction Industry Scheme (CIS). In addition to this, there are various internal regulations when it comes to hiring staff that you will need to keep in mind, labelling requirements, advertising rules and much more. Health and safety regulations are subject to change on a frequent basis also, so make sure that you keep this in mind.
With so many risks to consider, having a business plan which is thorough, but also flexible in order to encompass the changing legal and market landscapes, will help to ensure that your business is prepared for any event in order to succeed.