Starting a business is a dream for many people, but it can be hard to find success in markets already spoken for by large companies. In an ever-changing business climate, many small businesses and start-ups are finding their success by offering something new.
Pioneering your own field comes with plenty of risk, but if you find success, you may change the game and find yourself at the tip of a skyrocketing industry. To help you on your way, here are a few of the manageable risks you can look out for.
One of the most dangerous parts of starting a business that is treading new ground is legal risks. This kind of risk comes in many forms, such as intellectual property laws, federal and state regulations, or a complete lack of legislation to help protect your type of business. For example, if you start a company that specializes in creating custom repair pieces for broken plastic action figures, you may have to worry about safety regulations, possible copyright or trademark issues with companies that make action figures, and your own backing of any guarantees you may offer.
Don’t try to navigate these legal issues alone. Contracting, or even hiring into your business, a legal professional can be a great way to mitigate some of the legal risks you may face. If your new industry doesn’t require legal defense so much and instead calls for legislation to be made, you may need to find yourself a lobbyist or a diplomat. If you want to add them to your team, look for a business related undergrad mixed with something like a diplomacy relations graduate program.
Few people have the cash on hand to start a company from the ground up. This means that business owners generally have to borrow money in order to get started. Some business owners run into financial trouble because they borrow too much at one time or invest too much of their own personal money into the business without taking their own needs into account.
Before borrowing money, business owners need to have a plan to pay the money back, with or without profits. In new industries, it is difficult to get started without a lot of working capital. Costs around an emerging industry may be highest when it comes to marketing. If nobody has seen what you do/offer before, you absolutely must make yourself visible, but that comes at a cost. Business owners must reduce this risk as much as possible by having a financial plan for the future, and even hiring a financial advisor.
In any business, there is risk that a product might not sell, but this is especially true for new and emerging products and services. As mentioned before, marketing is key for an unknown company’s visibility. If you sell a very specific product that has a very specific, exclusive audience, you may find even more difficulty making a sale.
One way to get your foot in the door is to put the product into potential customers’ hands. If there is a way to offer a trial period, free sample, or demonstration, you can showcase the quality and benefits of your product up close.
Starting a business requires a lot of hard work and risk management. You never know what the road ahead holds in store, so do your legal research, make a financial plan, craft a sales strategy, and focus on making your dreams of success come true.