Running your own business is a risk, stepping away from a regular pay cheque for the uncertain profits of a business, is a risk. But you can’t stop there, because if you want to grow your business you are going to have to leave your comfort zone time and time again.
We quite often hear of the big risks taken by Entrepreneurs such as Elon Musk, Richard Branson and Bill Gates etc, but you rarely hear about the smaller business owners who face hard decisions every day that puts their livelihood on the line.
A risk is to expose yourself to harm or loss, but a calculated risk is the ability to deal with incomplete information and act on a risky option, that requires skill, to actualise challenging but realistic goals.
Risk-taking is made worse by a lack of financial information and any risk you take in business should never be pure risk, but rather a calculated one. By definition, you won’t have certainty, but you can lessen the risk and quantify the actions you are thinking of taking.
A little forecasting goes a long way
I recently bought a business – it’s a small accountancy practice in Rochester. This was quite a risky move because there was no way I could be certain of all the variables…what the clients were like, what the staff were like, whether I would be able to make the transition from the old owners etc.
But this was a calculated risk. I knew that if I could keep the clients happy, keep the turnover at the level it was at and reduce overheads, then the purchase would be viable. It was a risk because I had to finance the purchase through debt and commit to paying that back and there were huge unknowns, but it was a calculated risk.
The reason I was confident to take that risk is because I had produced a financial forecast of what I should expect from the business post acquisition. I had produced a budget and it gave me, and the bank, some confidence that I could do what I set out to do.
Many business owners who take risk do not produce forecasts or budgets for these risks and this is when the problems start. If you can’t make the forecasts work, then why would you take the risk?
Don’t be afraid to take risks
As the saying goes “If you always do what you have always done, you will always get what you have always got”, so in order to progress and grow, taking some risks is almost inevitable, but take these risks with some financial foresight.
How we can help
We help by offering you unlimited support for your business so you can call any time to discuss your next risk. We can help produce financial forecasts and budgets to give you the peace of mind that the risk will work out if all goes to plan.
We are not your average accountants; we are your partners in business.
About Us
The aim of Accsys Accountants is to help our clients grow their businesses, by ensuring their finances do not get in the way of growth. We are Accountants in Maidstone, Kent who offer different level of services to suit all types of company, including Accounts, Tax Advice, Bookkeeping and Payroll and we do all of this through a fixed fee service with unlimited support.
