What exactly is Risk Management?
This is basically taking a risk for your startup in a controlled environment. It is possible to take the risk and also have an action plan in the event of an emergency (e.g. for instance, if you run out of ammunition in the market). This is called Risk Management in the startup world. This is a fantastic example.
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One person has recently started a small business online offering mobile accessories. He knows that there is a huge market online for mobile accessories and that he has to compete to reach his customers. Before he can get into the business, he has to understand that his product is both unique and affordable. Now, if the product is inexpensive, how can it be unique. For this particular purpose it is necessary to go to all market sales. When he finds what he requires, the next step is placing an order for a large quantity. Then, when selling his product online; it will be able to attract customers sooner or later. He took a chance and made a large order. But, he did extensive research to ensure that the product was distinctive and affordable. This is called Risk Management in startup world.
Each startup in this world is a failure when it runs out of credit lines. It is obvious that your startup’s money is its lifeline. Risk Management is what you must be aware of so that your spending to be tracked. What can you do to achieve that?
1)STOP SPENDING STUpidLYThe goal isn’t to impress your girlfriend on a date. Do not be a show-off, nobody needs to know your spending capacity. Your customers are looking for some brilliant product packaged with top-quality services. They’re not here see your costly machineries, your heavily salaried employees and your mind blowing infrastructure. This is a big NO. This is the first step; focus only on good products, excellent services, and a fantastic marketing. All you need is that.
2)Do not run without a blindfold over your eyes:-Another reason that is a sloppy cause for startup failure is when you are spending money on the wrong products or services without seeking the market survey report. Whyis that? You may lose a huge fortune of money that’s why. Your clients are searching for something else and you’re not prepared to see that with your open eyes . Instead, you decide to shut your eyes as the horse and go straight. Take a look around and understand your market do not be frightened by a product or service you like. Discover what customers want and the customer’s needs and then follow the market’s needs.
I’m not saying that you shouldn’t try. I’m saying you shouldn’t make a decision without a plan.