Do you have plans to take your business idea and launch a startup in the New Year? If you are feeling a little overwhelmed with the task, know you are not alone. As you piece your business plan together and iron out the details, make sure you also consider the risks involved. Here are three of the major risks you will face in starting a business, along with three business relationships you should develop to mitigate those risks.
1. Sales Risk
No matter what business type you have or industry you are in, there is always a risk that your product might not sell. This is especially true for the new entrepreneur who is trying to launch new products or services. If your business idea includes a specific product that has an exclusive audience, the risk that you might not make a sale is even greater.
Strong Marketing Team
You can mitigate this risk by developing a strong marketing team. Marketing is the answer for improving an unknown company’s visibility, and testing the success of a product or service. The key is to place the product/service into potential customers’ hands and gather as much feedback as possible. Try offering a trial period, a free sample or a demonstration so you can showcase the quality and benefits of your product or service.
2. Legal Risk
When trying to start your small business, one of the most dangerous parts and biggest challenges will be the legal risks. The risks you might encounter can come in many forms, including: federal and state regulations, intellectual property laws and a lack of legislation to protect your business type. The best decision you can make is to seek out help and completely avoid trying to navigate these legal issues by yourself.
An Attorney You Trust
It’s important to secure the help of a legal professional from the very beginning. You will find that their assistance will quickly prove to be vital in almost every aspect of running your small business, from copyright and trademark advice and basic zoning compliance to formal business incorporation, liability and lawsuits.
3. Financial Risk
Very few entrepreneurs possess the kind of cash starting a business venture requires. For those that can successfully launch their startup, money can quickly become an issue down the road. Without sufficient cash, it will be hard to cover day-to-day costs, let alone hire new employees, purchase equipment and inventory and fund growth. To make matters worse, most banks are hesitant – or simply refuse – to work with small business and startups.
Outside Funding Source
To avoid placing your business in a dangerous cash-flow situation, make sure you research alternative funding options before you need the extra capital. You want to choose the option that allows you to quickly secure the cash you need, while also providing the best rates and adding as little debt as possible. Alternative business loans with First American Merchant, for example, offer flexible business funding options that provide quick cash – in as little as 24 hours.Get Started Now