Entrepreneurship is becoming a preferred career choice for young adults in their twenties and those nearing retirement age. Interestingly, about 31% of these entrepreneurs are opening a business to pursue their passion. But is passion enough to sustain the risks of running a business?
With constant changes in the global business market, risks are inevitable. Whether you're starting a business venture or already have an established business, you will encounter financial, environmental, competitive, economic, and reputational risks.
It becomes crucial to analyze possible challenges and pitfalls, establish safety measures to decrease such risks in the coming year and ensure business success. So, what is one way for an entrepreneur to decrease risk? Read below to gain full insight.
Possible Ways for an Entrepreneur to Decrease Risks in the Coming Year
Before jumping into the practical methods for minimizing risk, take stock of how to be an entrepreneur in today’s age. You must understand the roles of an entrepreneur, the necessary skills to build and maintain your business, how to establish and keep relationships, and reduce risks.
The best entrepreneurs don't take mindless risks; they properly analyze every decision. That said, even the best plans aren’t bulletproof. So let's dive into practical ways to decrease risks:
1. Understand the Trends of the Time
Industry trends affect market changes and customer behaviors. The AI revolution is here, and businesses are scrambling to decipher what it means for them. Most times, these trends are a result of technological changes or global occurrences. Not understanding these trends may be to your own detriment because your competitors are probably in tune with them and crafting ways to make the most out of them.
When you grasp a trend, you can understand its pitfalls and risks early, before you dive in. Going in blindly may be harmful to your brand and overall business outlook. Understanding trends will help you tailor your products and services to the season's demands.
Adapting to trends also fuels innovation, guides you on financial allocations, gives you a competitive advantage, and helps you understand the need for partnership while developing resilience in a changing world.
2. Invest in Automation
With technological advancement, 50% of work can be automated. In fact, 88% of small business owners reveal that automation helps their businesses compete with larger businesses. Automation streamlines operations, saves time and money, increases productivity, improves customer satisfaction, and reduces the risk of human errors. Additionally, automated systems can be configured to adapt to market changes, reduce employing too many staff, and allow for upward or downward scalability.
3. Leverage Technology
Beyond automation, you can leverage various technologies to reduce the risks of being an entrepreneur. You can take advantage of trending technologies like AI/AGI, machine learning, big data analytics, and cloud computing to store data, increase efficiency, and reduce risk. There's really no end to how much you can do with technology.
For instance, technology affords you tools like Statista, SurveyMonkey, SocialMention, Qualtrics, and lots more that make market research and business insights easy. In terms of marketing and sales, you can embrace digital marketing tools to reach out to more prospects, thereby reducing the risks of financial losses through poor marketing strategies.
4. Embrace Diversity and Inclusion
Organizations that embrace diversity and inclusion are 36% more profitable than organizations that do not. This is because incorporating diversity and inclusion unifies individuals with unique experiences, perspectives, and backgrounds to identify potential risks. Thus, they can also develop creative ideas, innovations, and analyses to mitigate risks.
Integration of diversity and inclusion into your company culture can also attract top talent and individuals with diverse skills. Hence, it can reduce the risk of job turnover, encourage team building, and channel company attention into investing time and resources to detect and combat risks.
5. Invest in Education and Training
Continuous learning and training are good ways to gather skills and relevant knowledge that will enable you to identify and decrease risks. Training and learning also open employees' minds to see opportunities instead of challenges, learn how to build customer relationships, understand relevant compliance orders, and improve sales and marketing strategies. All these elements are channeled into building a team to stay ahead of the curve and reduce possible business risks in the coming year.
What Is One Way for an Entrepreneur to Decrease Risk?
Engaging in networking communities online and on-site can help you access mentors, build professional relationships, and meet other entrepreneurs willing to share resources and knowledge on how to navigate risks.
Some of these communities also support local businesses by creating job opportunities and providing access to top industry experts who invest in education and programs that address societal issues and global trends and tailor solutions to your brand needs.
One such community is EO Boston. At EO Boston, we offer mentorship and peer learning with the most powerful tools for business growth. EO Boston comprises hundreds of business founders and builders who share experiences, wisdom, and support to help build transformational leaders.
Are you an entrepreneur who desires a network to share your challenges with? Do you want to learn more about risk management and growth? Do you wish to make life-changing connections? Learn more about EO Boston and our members.