Managing Risk At Your Business

Having a business comes with some inherent risks. Many start-ups fail; some business decisions don’t pan out; extenuating circumstances may take a chunk out of your profits. It’s the nature of the industry. 

With that being said, you can take steps to manage your risk. Aversive situations that could occur in the future due to you taking a specific course of action should be considered and evaluated during the decision-making process. You should be able to assess whether the risk is worth the reward, and whether you can afford the worst-case scenario. 

Let’s say, for example, that a successful restaurant owner decides that he wants to start brewing his own beer. He has the option to start this business endeavor with small-batch brewing equipment in the back of his restaurant, but he’s convinced it’ll be a massive hit with customers and he’ll be able to quickly regain his capital. He purchases land with a factory and all the equipment he needs. 

It fails. He’s operating in a small cottage town with two other significant breweries nearby; people aren’t familiar with his brand, the competition is fierce, and come winter his sales plummet because there aren’t any tourists. He goes into debt. He has to sell his restaurant business in order to pay back his creditors.

This situation is dramatic, but it does occur. You don’t want to make a decision that forces you to go into debt or sell off long term assets. You can do some risk management yourself when it comes to smaller decisions, but it’s advisable to consult with a professional when the stakes are high. 

At Greg Evans we have a variety of services that can help you mitigate risk: we can develop a business plan that will increase your chances of success, let you know the financial impact of a decision you are considering implementing, and model your growth in the future. Decisions don’t have to be scary, and risk isn’t always bad, but you need to be analytical about it. We can make sure your business is secure and your personal assets aren’t at risk.

Have confidence in your decisions and don’t take on unnecessary risk. You have enough to worry about without a dark cloud of debt hanging over you and creditors nipping at your heels. Schedule a free consultation at gregevans.ca or (705) 880-2224 to learn more about what we have to offer. It all starts with a conversation.