10 Risks Entrepreneurs Should Consider Before Setting Up Their Start Up
10 Risks entrepreneurs should consider before setting up their start up. Starting a new business from scratch involves a lot of risks and one must be willing to deal with any unexpected setbacks that may occur during the process.
It is however, better to be safe than sorry as the old adage goes and considering the startup risks one may encounter, the founders will be better able to identify which may have the highest likelihood of a negative impact on the start up. A plan of action can then be put in place to mitigate any unwanted loss. Here is a list of possible risks to watch out for;
1.Capability Risk
The risk that the startup is unable to scale its capability on a timely basis and at levels required.
2.Design Risk
The risk that the product or service design does not meet the required performance standard.
3.Economic Risk
The risk that the company’s success is sensitive to external economic factors.
4.Economic Life Risk
The risk that the product or services useful life in the marketplace is shorter than originally anticipated or projected.
5.Maintenance Risk
The risk that maintaining the company’s assets at appropriate levels will cost more than anticipated.
6.Management Risk
The risk that the management team lacks the skill-sets and experience to execute the startups’ business plan.
7.Operations Risk
The risk that operating costs are greater than budgeted, or that the service cannot be provided at the projected costs.
8.Procurement Risk
The risk relating to the ability of the startup to procure quantities and pricing of required scarce resources.
9.Volume / Demand Risk
The risk that the actual market’s demand for the product or service will not yield the projected sales volumes.
10.Technology Risk
The risk that less than optimal technology is developed or utilized or that a competitor leapfrogs the startup’s technology.
