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Finance
It is general notion that a start-up always faces higher degree of risk . But , this in not completely true . A bigger organization will always face higher degree of risks because of large size , huge finance obligation , bigger team , global operation etc . Shifting from one strategy to another to reduce risk is time taking and by the time it takes alternative course of action , aftermath of risk becomes severe and unmanageable .
In contrast , smaller organizations including start-ups can shift to alternative strategic plans soon to mitigate or reduce risk .
Let us discuss that what kind of general risks an organization may face :
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Management risk- any of the key persons leaving the organization Product risk- failure of product because of being out-dated or competitors came up with much advanced product or associated services Team risk- execution team leaving the running projects suddenly Suppliers ' risk- vendors / suppliers cancelling the contracts at very short notice Legal risk- companies falling into litigations with competitors Environmental risk- sudden development of rules and regulations by state or central government putting pressure hard to survive Financial risk- inability to service to debt or not meeting financial expectations of outside equity providers
General approach for mitigating or reducing the impact of risks :
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Try to forecast the risk- although it is difficult in changing business environment but to some extent it is possible as well as desirable . Do not ignore ifs and buts- always have back up plan ; be it related to product / services modification , new launch , execution team etc . Communicate well inside and outside the organization- miscommunication will create risk Maintain relationship- develop and maintain relationships with current customers / vendors and also with past vendors . Raise finance only to the extent of requirements and stage-wise Focus on cutting down the operational and other cost Develop new way of marketing
To conclude , risk is a double-edged sword . Taking risk is good but mitigating the impact of unwanted risk is desirable . Understand your business and business dynamics very well and deeply . Do counter attack if possible and required .
www . Venture-Care . com / Magazine December 2017
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