Beata Leyland
Project Manager & Business Owner & Author of this article
You can mitigate a risk already at the level of company creation, but it doesn't protect you from all jeopardies in the outside world.
Intrigued ?
Global pandemics, trade wars, wars, market crashes, and issues with transport (Remember the Suez Canal issue in 2021?) in the last decade have taught us well how to navigate such obstacles.
The tools to deal with them are there, it’s just a matter of adjusting them to your needs.
Here are 9 tips on how you can mitigate risk to your business:
- NDA and confidentially contracts.
It’s kind of obvious but so many people ignore it and pay the price later.
If you create a special anti-aging cream, protect your formula, and sign an NDA with factories.
Read contracts carefully before deciding to move forward with anyone.
- Diversification of suppliers/manufacturers.
You really don’t want to run into a problem when your goods are sold out and you are waiting for a new load; clients could go to another company and all your effort to build a reputation is partially gone (some clients would wait if they see something in you )
If you see that your skin care product sells very fast you want to make sure that you have someone who can do it equally as well as the first factory.
The ideal option is to diversify manufacturers on a global and local level.
What does that mean?
For big orders, have big ones with global outreach, for small batches have local ones (to not run out of inventory).
- Diversification of logistic providers.
Many of them already have such measures in place but it’s always worth to ask them how they navigate global crisis.
I would also suggest using more than 1 company.
Many companies offer with included insurance which can help with damaged goods.
- Diversification of your clients.
It doesn’t mean reach out to everyone, it means spread out geographically.
If you see a huge demand of your cream in the UK, then maybe you should also advertise in Switzerland or Japan.
Unmotivated, overworked and micromanaged employees will never give you everything they have. If you show them that it’s worth it, they can show you the full scope of their skills.
- Insurance.
Insurance helps when goods are damaged, or when something happens in the warehouse or with the external provider, as well as in the case of claims from the client side. Better safe than sorry.
- Smart money management.
Do the proper research of what kind of financial institution you want to choose, perhaps some of your income would be worth to reinvest in the bank as a fund? Passive income for the company will help you with getting funds later.
- Networking.
At the end of the day, it is people who will make or break your company.
People will buy your product, people will sell your product, and people will advertise by word of mouth.
Attend events, fairs, and trade shows not only as a marketing necessity but also as an opportunity to meet the people who are essential to your growth.
- Don’t overwork your employees.
People who you hire should represent your company values.
An unmotivated and always-scrolling sales rep will not be a good representation of a high-class anti-aging cream in Manhattan, the same as an overly ambitious aspiring chef in a dirty restaurant on a side street.
Do not micromanage unless necessary!
It doesn’t mean completely let go of control simply do so in appropriate way, in the atmosphere of trust so your employees can share with you pain points which you can help them to fix.
Unmotivated, overworked and micromanaged employees will never give you everything they have. If you show them that it’s worth it, they can show you the full scope of their skills.
- and finally … Don’t overwork yourself!
If you are an abusive boss towards yourself, who will you be /are for others?
Are these bullet-proof instructions? I can’t promise you that (maybe with a crystal ball ?? ). However, by applying all mentioned solutions, you should be just fine.
If you need help with risk mitigation, inventory, sourcing
or someone who can manage all operational activities by being an external buyer /procurement manager we can definitely help you!
Call or email us today!
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