If you are a small business owner or sole-proprietor, chances are you are already firmly entrenched in the role of “risk-taker.” After all, you started a business. With scary statistics floating around, such as the half of all small businesses fail in their first five years, you had to be at least a little daring to hang out your shingle in this economy, right?
But sometimes after the initial risk of starting our small business, we often begin to rest on our laurels. If we do the same old thing day in and day out, running our business just as we did when we first started it, are we really risk-takers anymore? Or are we stuck in the same day in and day out routine we faced back in the corporate world?
Worse, failure to take calculated risks could be the reason that your business is stagnating or shrinking. So why don’t we take risks with our business? First, we’ve discovered a good thing – a good routine, a good sales pitch, a good marketing plan – and everybody knows you’re not supposed to mess with a good thing, right? Second, we see risks as decisions that may cost us money and time and result in little reward. What we often don’t consider is that a calculated risk can result in a reward beyond our wildest dreams.
Here are just a few of the calculated risks that, if everything works out, can lead to great rewards for your company.
- Marketing to a Niche or Specialty – Right now you are a generalist, but you feel that you have extra expertise to work in a particular niche. Or perhaps you don’t have the expertise, but you do have an abundance of desire to get started in a new specialty. Would you be willing to risk turning all your marketing efforts toward finding clients in that specialty? This may include the time and money investment of changing your website, printing up new marketing materials, and contacting a whole new list of potential clients.
The risk is not so risky if you… Do your market research first. Is there a demand for your services? What types of customers are looking for those services? Talk with or interview some potential clients about their needs, or perhaps even send out a survey or hold a focus group.
- Co-Marketing – What if instead of competing with others in your industry you partnered up with them? Sure, we all think the competition is out to steal our secrets and our clients, but that’s not always the case. Just because two people are cake decorators does not mean they go after the same niche market (i.e. weddings, birthdays, office events, etc.) And if you have partnered up with someone else in your industry, you may find yourself the recipient of their out-of-specialty referrals. Not to mention all the other benefits of co-marketing, which could include pitching in together to mitigate marketing costs, or even sharing a virtual assistant or office space.
The risk is not so risky if you… Check out your co-marketing partner thoroughly and get everything in writing, preferably with both of you using your own business attorney.
- Hiring an Employee – Many small businesses start out as sole-proprietorships and stay that way forever. While there is nothing wrong with a sole-proprietorship, they do have their limits – namely that one person can only get so much work done in a 24 hour day. Expansion is a risky endeavor for businesses – expand too quickly and you lose money all around and risk layoffs, expand too slowly and your business never reaches its full potential. An employee or two could be just what you need to transform your business from a break-even sole-proprietorship to a successful engine for your local economy.
The risk is not so risky if you… Start slowly with an independent contractor. This will allow you to test the waters without incurring the risks of an employer. If you do decide to hire, do it right. Get your taxes and state registration in order, buy worker’s compensation insurance (if required by your state), write an employee handbook, and make your expectations of your employee clear from the beginning.
- Branding Your Business – Marketing types go on and on about the power of branding, but many small business owners either do not see the need for branding or feel like they do not have the time, money and resources to become known as “Crazy Bob, the Title Pawn King!” (or perhaps something a little more sedate and professional.) The accoutrements of branding – a professionally designed logo, a website, a slogan or tagline, a blog, and a well-thought out business presence – take time and money to design. Many small business owners, upon seeing that they are getting by fine with their hand designed logo and template website do not take the time to explore how branding could transform their business from a generic company to a household name (at least within their specific niche.) Branding is a powerful tool for a small business owner, though, and one that – if done right – can mean the difference between scraping by and standing out.
The risk is not so risky if you… Do the legwork yourself before obtaining a branding consultant. Figure out your niche and your target audience and position yourself as someone trustworthy in their eyes. If you feel that you have the creativity, start your own blog, write your own articles or letters to the editor, and come up with your own tagline. While branding can take a lot of time and legwork, the more you know about how you want to portray your brand, the easier (and cheaper) it will be to work with a graphic designer, web designer, blogger, or other branding consultant.
Taking a calculated risk now and then could be just the thing you need to take your business to the next level. Just don’t forget, they’re called “risks” and not “sure things” for a reason!
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