Expanding your Business: How to Minimise Risk as an Aspiring Entrepreneur
As the current economic climate in the UK continues to impress, the nation’s SME’s are benefitting from increased levels of confidence. According a new survey conducted during the first financial quarter of 2014, a staggering 86% of all SME’s have reported rising sales figures in comparison with last years’ figures and also expect this trend to continue throughout the next twelve months.
With this in mind, it is clear that British entrepreneurs will become increasingly keen to develop their ventures and diverse revenue stream while the economy is buoyant. Such aspiration creates challenges of its own, however, especially in relation to rising levels of market competition and the risks associated with investing more capital into a relatively fledgling business.
How to Minimise your Risk as an Ambitious Entrepreneur
So if you have reacted positively to the level of sentiment among British SME’s and wish to expand your own business, it is important that you think practically and look to minimise the level of risk involved. Consider the following steps towards achieving this goal: –
Create a Flexible Employment Structure
One of the first tasks you will need to undertake when expanding your venture is determining a viable structure that can take you forward. One of the key aspects of this will be deciding whether or not to take on additional members of staff, as this has a huge impact in terms of cost and profitability. You will therefore need to estimate the cumulative cost of taking on staff members and measure this alongside any additional profits that you are likely to make, before considering the merits of flexible employment and hiring freelancers. Initially, you may be better served by adopting an organic approach to growth and taking on temporary staff to test your newly discovered business model.
Consider the Benefits of Temporary Structures and Offices
On a similar note, the decision to take on staff or new clients may well dictate the need to change commercial premises. If you currently operate from your home or a single desk in a renal office, for example, this may be inadequate if you hope to increase your workload and diversify income streams. Before you rush out and invest in an expensive and long-term commercial lease, however, consider the benefits of temporary structures and how these can be used to test new business ideas and experimental models. Companies such as Neptunus offer a wide range of these structures to clients, so you can select an adequately sized building to help push your business forward.
Consider Affiliate Selling to test Sample Products
One of the biggest risks revolves around diversifying your business, and branching out into the sale and supply of entirely new products. The cost of manufacturing these can be considerable, while investing in stock can also claim a considerable amount of your business capital. To help negate these risks, you should minimise the amount that you tie up in new stock and look to sample these products by selling a limited amount through affiliate websites and resources. While you will need to pay a predetermined amount of commission to all affiliate sellers, you can also invest less into marketing and see how your new products perform in a live market environment before making an informed decision on their future.