Modern businesses, especially start-ups, have become famous for taking risks. The nature of these businesses is that they work to maximize their risk-taking potential. In many ways, this risk-adverse attitude helps them thrive, increase their valuation, and earn handsome profits.
Though, for every one start-up that has been successful at taking risks, there are ten others that have failed. Taking risks are certainly a double-edged sword.
Related Post: What Risks Should Every Business be Prepared for?
However, one risk a start-up company should never take is to be lackluster in their data security. Having good data security is essential to the health of a new company.
In this article, we are going to examine ways that start-ups can guard against business risks. If you are a business owner or an entrepreneur who is looking to heighten your security and manager potential risks, you should read on.
Internal and External Risks: What Entrepreneurs Need to Know
Many management experts have tried to classify risk under two main labels: external risks and internal risks. In this section, we are going to look at them briefly.
- External Risks include, but are not limited to, external factors that are beyond a businesses’ control. For example, external risks may include changes in the interest rates of banks, new government regulations or unforeseen natural emergencies.
- Internal Risks, as the name suggests, are limited to what happens within a business organization. For example, internal risks may include data breaches and cybersecurity attacks, employee attrition, poor business deals, and financial misconduct. In other words, these risks are within the company’s control.
Entrepreneurs and start-ups need to guard against both types of risks. One way to guard against this is through a good internal system. For example, using SAP GRC to ensure organizational problems, coordination, and threat perception would be a good start. This can help a business protect itself against cybersecurity attacks, insider data breaches, or other issues.
How Entrepreneurs Should Manage Risks in their Start-Ups?
In the last section, we looked at the two main categories of risks. In this section, we will look at how the management of risks can be done by start-ups and entrepreneurs.
Prioritize the Calculation and Methodology of “Emergencies”
The first step that an entrepreneur needs to take is classifying the emergency. This means setting priorities. The classifications need to be divided into compartments like: ‘likely to happen’, ‘might happen’, ‘chance of happening’, and ‘will happen’, etc.
Notify Internal Employees of the Process
Many entrepreneurs lead businesses with a know-it-all kind of attitude. They fail to understand that mitigating risk is something that all the employees on the team need to do and follow. Therefore, business owners need to get all their employees on board with risk management. Spreading awareness is critical to guard against risks.
Working with a Specialized Risk Management Team
If entrepreneurs dedicate every working second to risk management, they will not have time to do anything else. Sure, entrepreneurs need to take risk seriously, but they also need to leave the training and technical aspects to the experts. There are two ways a company can go about it: either hire its own team or outsource it to external companies.
Controlling Data, Digital Touchpoints, and Growth
While the growth of online platforms has opened avenues for bettering everything from internal operations to customer reach and acquisition, it has exposed much more data vulnerabilities. For a start-up, working with data comes naturally. This is why attempts should be taken to protect company data at all costs. Data management should be followed effectively.
The Bottom Line
Taking risks and start-ups are synonymous with one another. However, risks should be done strategically, which includes preventing some risks. By managing risks in the right way, new businesses can ensure that they are growing steadily without interruptions to their growth.
What is your business doing to mitigate risk? Let us know in the comments!