Guide to Risk Management through Due Diligence
Starting a business is one way to create long term wealth. However, despite the many opportunities in starting a business, there are also many risks involved.
People know that there are risks involved in starting a business. And it is shown by statistics that a majority of small starting businesses fail. Although these are simply statistics, they do not inform us the reason why these small businesses fail. And we don't really know how accurate these statistics are.
The truth is that today the risk of not starting a business for many people is greater than starting one. If due diligence is done and people are attentive to managing their business, they can reduce the risk of failure substantially. On the other hand, if you don't start a business and continue working in the company you are in, you cannot do anything to reduce the risk that your employer will go out of business and you will lose your job. You cannot insure that you will have company pension at this website will be there when you retire.
It is very risky to put everything in an employer's basket. And the risk is far higher than when you build yourself a business. Somebody has said that if you want to make a living, get yourself employed, but if you want to get rich, you need to start a business.
Due diligence is the means to manage or minimize risk in starting a new business. What due diligence means is simply to educate yourself sufficiently to understand what the genuine risks are and then making a decision not based on fear of what might be but based on knowing of what is. Know about Nicolas Giannakopoulos here!
However, despite due diligence, there is still uncertainty in every endeavor. Due diligence can help minimize that uncertainty and with it you reduce risk to an acceptable degree.
Due diligence is simply educating yourself. You need to research the field you are contemplating on entering. You need to interview people in the same business, study trade journals and other publications with information about your field, make inquiries in related businesses to learn market conditions and use the internet to deepen your research.
If you identify a risk factor, investigate that factor and determine the actual level of risk and determine what can help minimize that risk. For example, if there is a risk that you customer will injury himself in your business and sue you, due diligence identifies acquiring a liability insurance as a means of minimizing the risk of exposing yourself to that problem.
When you have thoroughly researched your field and the business you wish to start, you can satisfy yourself that you understand the actual levels of risk and you know how to minimize them sufficiently to manage them.