Did you know that 20% of small businesses fail in the first year? However, making it past year one doesn’t mean you’re out of the woods. According to the same study, half of all small businesses fail by year five.
The question you need to answer is how to avoid the same fate. What can you do to make sure your business is thriving after your first, fifth, and twentieth years?
The answer lies in avoiding detrimental business risks that have the potential to run your company into the ground. We’re here to provide a little insight into risk management so you can enjoy a long and successful career as a business owner. Keep reading for the top business threats that could be looming over your company.
Too Much Overhead
One of the biggest risks in business is starting out with too much overhead. This is a common mistake made by brand new business owners who may not have analyzed the market thoroughly.
We always recommend starting small and allowing your business to expand as your customer base grows and becomes more predictable. Launching an untested business with a massive amount of overhead is a sure-fire way to bury yourself in debt.
If your business is doing well, the same rule applies to expansion. Learn how to scale your business appropriately without taking on too much overhead.
Poor Marketing Efficacy
Running a business is a balancing act. Where you put your time, energy, and resources directly impacts the success of your company.
Marketing is one area in which you can’t afford to slack off. Ineffective marketing strategies (or a lack thereof) are one of the most common business risks. If consumers aren’t seeing your brand and hearing about your products or services, you can’t expect to make any sales.
Just as importantly, your marketing campaign must hone in on your target audience. You must represent your brand in a way that shows consumers you are better than your competitors.
Employee injuries are one of the greatest risks in business, particularly in physical jobs or those that are inherently dangerous. However, that’s not to say that office-based jobs and other sedentary work environments are immune to these business threats.
Proper risk management assesses all the environmental factors that can lead to workplace injuries. This includes everything from slips and falls to equipment-related injuries.
Click here to find out more about how you can help your employees avoid unnecessary injuries in the workplace.
Bad Public Relations
Running a business successfully requires building a reputation for yourself in the community and industry. One of the worst risks in business is developing a negative rapport with consumers. This is often the result of:
- Poor customer service skills
- Poor communication skills
- Low-quality products
- Low-quality services
If you’re not holding up your end of the bargain, you’re going to get bad reviews. The more bad reviews you collect, the less likely you are to secure new customers.
Are You Avoiding These Risks in Business?
As you can see, there are a ton of risks in business that can lead to the downfall of your company. Fortunately, all of these business threats are within your control. Take positive steps to mitigate these issues.
For more business advice or risk management tips, stick around. Look through some of our other articles to see if you can find more helpful insight. Our blog was created to help business owners like you.