I heard two radio jocks talking to small business experts last week about risks that small businesses face. They covered very little of the internal risks that entrepreneurs face and instead concentrated on external risks.
If you want to examine your internal risks, then list everything you can with a pessimistic view on what risks your businesses face. I’m not talking about external risks such as the economy, politics, rioting, looting, social upheaval and lack of supply of basic services such as electricity and water.
We’re looking at things that you’ve got control over in your business because you may be allowing them to happen.
1 Cash flow. Without cash flow your business is on a downward slide. Watch it.
2 Theft. Make sure your business and accounting systems can pick up theft quickly. Get in security if you detect a problem.
3 No provisions. Some business owners operate from feast to famine. It makes sense to save in a cash kitty for when times are slack. Or when there is a big upset in the business.
4 Motivation. You drive your business. Your energy makes things happen. If you slack off, trouble will loom.
5 Staff morale. Arrogance, hostility, and bullying of staff is a risk, a big risk. Carry on beating up your employees and you’ll lose key people.
6 Overextending your business. Each business has a capacity. Taking on too many customers at once could overstretch your business. Many other things could cause strain. Be mindful of this.
7 Bad debts. Credit control is essential. Only fools don’t get payments straight away. Give a customer an inch and they’ll take a yard.
I could go on and on with internal risk, but let’s leave it there. I’m sure you can make a list of your own and think up countermeasures.
Disclaimer: The information provided in this blog post about internal business risks is intended for general informational purposes only and does not constitute professional advice. While we strive to provide accurate and up-to-date information, we recommend that you consult with a qualified professional, such as an accountant, lawyer, or business advisor, to address your specific situation and needs. Relying solely on the information provided here without seeking professional guidance could result in unforeseen issues.
