Every business owner, including SMBs, should be prepared for its management when it comes to financial risks. They often function with a thinner margin and lesser financial resources. Anything can happen, so business owners must take the appropriate steps to remain afloat in the niche market.
Kavan Choksi – Get the best strategies for managing financial risks
Kavan Choksi is a highly esteemed name in the field of education, finance, and business. He is passionate about innovative technology, and according to him, the daily functioning of a small business is really challenging as it is exposed to several risks. You must have a planned strategy that is smart enough to deal with them. Now, as a business owner, you cannot avoid risks altogether. However, they will aid you in managing risks in a better way.
The following are five strategies for the management of financial risks-
- Be aware of your weakest points- Like every company, your business has weak points, and list them on paper. Some could be –
- Knowing monthly cash-cost needs.
- Do you have a backup vendor if your present one goes out of business and others?
The goal here is to make a list and have a plan to address them.
- During the first couple of years, keep business operations lean- Ensure your business is lean and low-key in the first few years of operation; once it picks up, you can focus on growth. Most businesses ignore the above, and this is why they lose money.
- Get informed about risks and rewards- When you do not have the knowledge, you will encounter risks. Most experts in the business claim that these risks arise because they were not educated about them. You should keep yourself updated and informed all the time when it comes to the events that take place around you. If you are a small business owner, you should be aware of such events to curb risks. In case you are not aware of something, seek professional guidance in the field.
- Financial records- you should ensure that your financial records are accurate and correct. This helps you determine the break-even point of the project and plan your next step accordingly. When you have clarity and do not have an accountant after the inception of your business, you can seek the aid of a financial consultant for guidance.
- Take the advice of a business mentor- You need to ensure that you have a scalable business, and this is one reason that small to medium businesses fail. They lack knowledge and guidance. It makes sense for them to seek the help of a good business mentor to get the direction they need for the business. In this way, they are able to get a competitive edge over their peers in the market.
According to Kavan Choksi, the above strategies help owners of small businesses to concentrate on their core tasks to grow consistently with time. They perform better than their other peers in the market to establish credibility in the niche market successfully.