What Are Common Risks Many Businesses Face and How Are They Eliminated?

Starting a business is risky and must be managed! I started my consulting practice in 2003. At the time, I decided to join the local chamber of commerce. At one of the workshops, I was asked by one of the coordinators if I had an exit strategy or backup plan. My response, absolutely not! Why did I say that? Because I had just been laid off for the second time in my career; the thought of sending out resumes was unappealing; and psychologically I needed to be absolutely committed to what I was doing.

Now, my type of business does not have the financial risks for a startup. I did not immediately have to hire any employees, or buy inventory, enter into a lease, buy furniture and fixtures, etc. A few thousand dollars and a computer and I was off and running.

What were my risks: starting from scratch, not having the support of a large corporation and all the benefits it provides, learning how to self-promote; was that ad I placed in the newspaper going to be a bust or reap rewards? Was that networking group I joined going to pay off or not?

Due to the nature of my business, I encountered many small businesses and have been able to observe the successful risk takers and the not so successful risk takers;

The best risk takers were the calculated risk takers: having a business plan, having a source of capital, not entering into expensive leases, not overdoing it in the furniture and fixture department, managing debt not letting it manage them, negotiating rents, rates, etc., doing their homework with regard to their particular market, having a budget. The more you know, reduces your risk!

The worst risk takers sign leases they cannot afford, do not negotiate terms, rates, etc., have no idea whether a market even exists for their goods and services, do not have a plan of any kind, overspend on everything, do not keep good records, and do not ask for any advice; and if they do they don't take the advice!

What is an entrepreneur to do?? Recognize that to be successful a business has to take risks, but they can be managed and are worth it! Learn how to negotiate! The rent/overhead must be paid whether you have any business or not. If you have fallen into the expensive lease, see if your landlord will negotiate. It does not hurt to ask. Do your homework with regard to location, size of market, costs of doing business (insurance, utilities, employees, taxes, fees, etc). Beware of debt: you could still be paying for inventory years later that is long gone!

Good Luck!

Margaret L Crosby, EA of Pace Consulting Beverly MA Advanced Certified QuickBooks ProAdvisor can assist you in solving your business issues. Certified in QuickBooks Point of Sale software, call 781-738-1669 or go to http://www.paceltd.com for your free report.

Article Source: https://EzineArticles.com/expert/Margaret_L_Crosby/1385447

Common Crowdfunding Problems and Solutions

Often, entrepreneurs are interested in launching a startup company or new product idea, but lack the financial backing necessary for the initial launch. Running a rewards-based crowdfunding campaign may be the perfect solution, offering a way to raise the capital necessary for manufacturing and other expenses before the product or business has been created. Essentially, crowdfunding uses the financial backing of many, usually in the form of pre-orders, in exchange for receiving that product for free or at a significant discount after completion. A more traditional loan or investor may demand ownership of a large percentage of your company, or extend loan terms that include large initial payback terms and high interest rates, in exchange for their financial backing.

The first step after the typical product crowdfunding campaign has ended is to get the product manufactured in a timely manner. It is important to have a manufacturer in place and ready to start on your project, as well as a backup plan. In the event that your product goes viral, the demands placed on your manufacturer may be more than they are equipped to handle, so have a contingency plan ready for that possibility. Delays on delivering the product to your financial backers may create anger and damage the reputation of your company, destroying relationships with crowdfunding platforms, investors and the media. One strategy is to limit the number of options you offer. For example, too many choices of color, size, or type of product may increase the costs of manufacturing, especially if you don't meet their minimum quantity requirements for every category. In this case, profits may suffer due to higher manufacturing costs, or the investors may not receive their products at all, damaging your company's reputation. Keeping your product offering as simple and streamlined as possible is imperative to a successful crowdfunding campaign.

Another element critical to the success of your campaign includes accurate calculation of the expenses involved in packaging and shipping. Failure to correctly estimate not only shipping costs, but international shipping costs, is imperative to your overall profits, and could single-handedly sink your campaign. Decide prior to launching your campaign whether you want your product to only ship domestically, or whether you want to include international shipping.

Most Kickstarter campaigns do and should include an international option, so accurate cost estimation is crucial. Unexpectedly high demand for your product not only affects manufacturing costs, but also packaging expenses. This portion of your campaign would best be served by a shipping fulfillment company. They can give you accurate estimates prior to launching your offering, as well as handle the entire packing and shipping process. As with manufacturing, research companies that offer fulfillment services to find the one most capable of handling your anticipated volume, as well as any that can assist you in the event you encounter unexpectedly high demand.

If your Kickstarter project needs order fulfillment services contact Ship My Orders at http://www.shipmyorders.com

Article Source: https://EzineArticles.com/expert/Raymond_Santopietro/371042