Chapter 1: Understanding Your Independent Consulting Business's Risks
Part 1: What Is Business Risk?
Running your own business comes with a certain amount of risk. And while most people probably agree with that statement, defining an abstract concept such as "risk" can get a bit tricky. Here's what you need to know about risk.
Every business action you take can result in either a positive outcome or a negative outcome. Some actions have less potential for negative consequences while others have a higher potential. This potential for a negative outcome is what we call "risk."
In business, a negative outcome can be anything that causes your business to lose money, such as bad weather, power outages, fires, thefts, lawsuits, and more.
A business can control, or "mitigate," much of its risk by taking steps to prevent financial loss. But you can't control every factor that affects your business. That's why small business insurance was invented: to take financial hits so you don't have to.
Next: Part 2: How to Identify Your Marketing or Management Consultancy Risks