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CopyrightŠ Bob Neville 2014-2019


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Sounds like a great business idea, but…! What are the RISKS…?

` Every business idea and every business carries a level of risk. How can you identify these risks and just as important, can you eliminate or reduce them? When we consider our “Growing a Business” analogy – even the best farmer, planting the right seed in the perfect soil and climate, still has risk, some within his control and others that are beyond his control. If we carry this reality across to any Business idea, we also see that there are elements of risk that we can control to varying extent and others which are beyond control. Others still may never be apparent before the business is actually started or may become apparent long after the business is started. A Community Micro-Facilitator can help you to identify the common sources of risk and discuss what action might be taken. This is done by encouraging you to look for what may be causing the risks (or what elements could be likely to contribute to the risk). If we can do this effectively, not only will we be aware of and focused on key risk factors, we will also be able to consider to what extent these can be

eliminated, reduced or controlled, thus reducing the Overall Apparent Risk Factor proportionately. Consider the contributing factors to overall risk: Firstly: The Apparent Marketability of the idea itself. Marketability is a measure of how easy or how difficult it will be to viably establish the business in its initial growth stage from “planting’ the idea in the marketplace, to the point where it is providing a viable “crop” (return). This is influenced primarily by the level of market volume apparently available, amount of direct or indirect competition, comparative cost and especially, what is “different” about your business that will provide you with a marketing edge. It is not easy to greatly improve the apparent marketability. Generally, the level of Apparent Marketability identified during Micro-Facilitation Assessment will be fairly close to what to expect, unless something can be done to make it “different” enough to capture the interest of the market or unless some kind of realistic incentive or unique attribute can be identified.

Copyright© Bob Neville 2014-2019

Secondly: Resources and Commitment. Regardless of how “marketable” the business idea may be, Resources (particularly money and time) and Commitment (who will be expected to do what in the business and just how fully is each person involved actually committed) is are distinctly separate issues to marketability. For instance, someone can have a great idea for a business, one that seems highly marketable. However this fact alone will not ensure that the person who has the idea has the necessary resources or the essential level of commitment to make it happen. Consequently, we need to evaluate the marketability of the idea itself in parallel with available or accessible Resources and the apparent level of Commitment and capacity to make the idea happen. All too often, this is where a great idea can fall back into a “black hole” and this is where many fledgling businesses fall over. They start on a foundation of enthusiasm, but too often, it takes longer than anticipated to reach viability and as the enthusiasm wanes and one or more people involved begin to lose interest, things start to fall apart and the money runs out.


3 For this reason, it is so important to really look at the genuine level of Resources and Commitment required and given, before the business is started, especially if family and friends are expected to be involved. Their level of commitment may be vastly short of that shown by the person who has the idea. However, there is yet another dimension to the business establishment equation which will impact on the overall potential for the business to succeed. Thirdly: Management Capacity. For any business to grow, all dimensions of the Management Quadrant need to be fully under control. If there are shortfalls in Management Capacity (that is, in Industry knowledge/experience, Marketing skills, Operational skills and Financial Management skills) then this too, will impact on the potential of the business. When we assess the apparent Management Capacity in these areas, we will usually see that this requires the input and involvement of a variety of skills and experience that are not able to be provided by one individual. Further, if one individual does have the ability to do all of this in the business, he or she would not usually have the required capacity of time to do so. When we have reviewed Management Capacity, you will

have a clearer indication of the level of management shortfalls and to what extent this might impact on the effective management of the business. Where would your idea stand in this light …? By looking at these basic risk factors (and there are others) we would really start to paint a picture of the Risk Factor based on all of the generally known influences. So how will your idea stack up…? Through the combined risks evident in Marketability, Resources and Commitment Factors and with the average risk presented by the four Management Capacity indicators, we can gain a relatively accurate insight into what you are facing. This can often be a sobering experience – a crossroad where they see their inflated bubble deflated somewhat or even burst. However don’t despair. Far better to be faced with this reality NOW - ideally before investing life and limb, rather than to rush ahead and risk everything. By now, it will be clearer as to whether the idea represents a sound opportunity a very risky one. The next step will be to consider whether or not the apparent

Copyright© Bob Neville 2014-2019

level of Initial Risk can actually be significantly reduced, and if so, to what extent. Reducing the Apparent Initial Business Risk Factor (To what extent is this possible?) The extent to which risk can be reduced will generally vary considerably from business to business. If the business idea itself lacks overall marketability we can explore the potential for this situation to be improved. Marketability is what I call the “Primary Risk Factor” – in other words, if there is no viable market for the product or service then no amount of financial resources, commitment or management skill will change the marketability. However, if an idea has sound basic marketability or if it can be further improved - then reduction of risk in the resource, commitment and management areas will reduce overall risk proportionately. A Micro-Facilitator has the tools and training to effectively and economically work through these issues and mentor you in other aspect of your Business Development. This can be done in a self-paced manner at very economical mentor rates to assist your micro business to identify and address specific need. If you want help from a Micro-Facilitator, or if you are interested in training as a Micro-Facilitator, contact me .

Profile for Bob Neville

Sounds like a great business idea...but?  

Every business idea and every business carries a level of risk. How can you identify these risks and just as important, can you eliminate o...

Sounds like a great business idea...but?  

Every business idea and every business carries a level of risk. How can you identify these risks and just as important, can you eliminate o...