“Higher the risk, higher the reward” is the most common advice thrown around new entrepreneurs and startups by potential bidders and VCs in a bid to motivate them, however, that may not always be the wise approach.
But what about reducing and managing risk from day one? This is something that is seldom talked about in business summits and autobiographies, however, most entrepreneurs practise the art of de-risking their business from the very beginning. This provides them with a safer and accelerated route to grow their startup without putting the business under unnecessary risks.
1) Solve Problems as Your Main Revenue Stream
Budding entrepreneurs often waste a lot of time by taking unnecessary courses, building fancy websites and things that don’t solve problems or deliver any value. The easiest way to be successful is to solve problems quicker, better or more economically than your competitors.
Yes, gaining knowledge, improving skills and adding new ones is important, but it can be done along with generating revenue through problem-solving rather than preceding it. While having a fancy app or website does not hurt, the modern product and service industries are highly dependent on whether the customers get their money’s worth. Whether it is social-media management, inventory management or website development, solve problems first, beautify later.
2) Target Existing Sharks in the Game as Your Clients
Solving problems for the biggest companies in your domain of expertise is a sure shot way of getting a lot of high-paying and constant work. From helping companies remotely manage their recruitment to fulfilling their environmental and legal obligations, there are a lot of things that can turn your next promising idea into a successful startup.
For instance, Workday became among the most used softwares by Fortune 500 companies for managing the attendance record of employees, student data from college hires and other financial data. By becoming a third-party vendor that simplified the maintenance of records and took the responsibility for a lot of regulatory and compliance work, they solved many problems for bigger companies through a single software.
3) Company and Surroundings Matter
Surrounding yourself with knowledgeable and successful people can help you avoid costly and fatal mistakes while also giving you a ton of technical and experiential knowhow that they have accumulated over the years through trial-and-error.
Mentors can also give you some much needed motivation and balance during times of turmoil. According to a reputed study, entrepreneurs with mentors increase their revenue by 83% more than their peers.
4) Avoid Burning Money on Unnecessary Expenses
It is easy for a new startup to get sucked into spending their limited seed money on unnecessary expenses. Be it building a huge team, spending on expensive ads in newspapers and streaming services or borrowing more money with tough repayment conditions, you must exercise caution before jumping into all this. Moreover, it is easy to focus on too many products and services while not excelling in even one of them.
Carefully evaluate your needs, diversify your risk and fully focus on the primary revenue stream initially in order to de-risk from day one.
