Why You Need Some Kind Of Risk Analysis
When you first start off in business, you’re in uncharted waters wherever you go and whatever you do. Other people can tell you about their own experiences in a bid to warn you of shallow rocks or a reef that comes out of nowhere when you go in a particular direction, but it’s always down to you. The final say of what goes on in your business, lands in your lap every single time. So what if you were the captain of a ship and you had a map that was completely void of markings? You would take things slow and take down as much information as you can before you really opened up the sails to gather speed. That’s exactly what risk analysts do for businesses around the world. They are the watchman in the crow’s nest that have a vantage point from which they look out and advise you where to go.
The financial snakes and ladders
Understand one thing in business and you will understand how risk analysts think. It’s harder to make money than it is to lose money. It’s much more time-consuming and difficult to acquire wealth than it is to have it taken away. Unfortunately many learn this the hard way, but you should not fall prey to this financial snakes and ladders game. It’s a good idea to hire a freelance accountant and financial advisor simultaneously. The accountant will give you the rundown on what state your finances are in. the advisor will then take that information and work with you to discuss what your options are. Maybe you want to hire more people and have the budget to do so. But would it be better to hire a multi-talented employee that can take on two roles and get paid 2/3 as much? Financial advisors may come from a financial and mathematical background but their profession is to manage risk as well.
The currency of trust
Partnerships really only begin when two parties wish to work together for what they each perceive will be a beneficial relationships. There has to be something in it for both entities and very rarely one business will be set to gain more from it. That’s why small businesses have no issue partnering with large business because their profile will increase immensely. But two small businesses working together is a different story. It’s right that you perform a risk analysis such as a Lexis Diligence service. This will assess whether or not the other side is trustworthy. With a database of over 26,000 new sources, 1,000+ sanctions and watchlists, and more than 1 million PEPs. They also have 3,000 databases on public and private companies across the world. With this much information you can be told if a small business who you wish to partner with is a low or high risk.
Partnerships are very valuable to your continued growth but they’re also risky because you’re dependent on another business. For that reason and for financial safety, you should employ some kind of risk analysis.