Every business person should know that when venturing into a new business they are likely to face some challenges and risks. Some challenges in a business can be predictable and some cannot be predictable. Every person who ventures into business is a risk taker and should expect to meet some challenges at some point in time.
Challenges can be overcome while a risk is always difficult to be eliminated. Some of the challenges that a business is likely to face are; firstly, setting up a business idea, this is considered to be a challenge because, for someone who wants to venture into business, it is always difficult to come up with a business idea that can suit a certain environment. Secondly, raising capital for a business, for one to start up a business, he or she is supposed to have enough funding or capital that can help in raising a business.
Finding a business location is also a challenge, in the sense that, every business should suit a need of a certain area, so to come up with a better location where your business can be done is always difficult. Because in looking for a perfect location, one is supposed to know the cultural norms of that area, environmental standards, resource availability, distribution channels, and price, because sometimes a price for a certain item is raised due to the location and the life standard or status of people in that area.
Disasters have a big impact on many people’s businesses. Floods, winds, and other events can hinder a person’s business. Competition is also a challenge in business. It can be hard to overcome competitors because they constantly come up with new ideas to boost their business and attract more customers. When there are other businesses doing the same thing as yours, it’s difficult to gain customers. Business people also face challenges like not having enough money, not enough employees, and sometimes getting sick.
Businesses also face bankruptcy risks. Most business owners are likely to face bankruptcy which is when one is unable to pay what he or she wore to the bank and has had control of financial matters given, by the law court to a person who sells your property to pay your debts. So many business owners might be announced bankrupt by the court, so this is likely to affect their business.
Financial risks are also a risk in a business. This is whereby there is a possibility of losing money on an investment or business venture. Some more common and distinct financial risks include credit risk, liquidity risk, and operational risk. Financial risk is a type of danger that can result in the loss of capital to interested parties. This type of risk typically arises due to instabilities, losses in the financial market, or movements in stock prices, currencies, interest rates, etc.
Some risks that a business person face are competition with other business, environmental risk, reputation or image, political risk, change in technology, and finding a market that is located. Some challenges are just the same as risks.
When venturing into business, everyone has to know that as the business grows it meets some challenges and risks, some challenges can be avoided and some cannot. So, it is good to always be alert that anytime anything can happen to the business you are doing.
