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Expert Answers to Biz Questions

Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.

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Risks to Consider Before Starting a Business


There is nothing more exciting than starting your own business, but there is also nothing more risky and complicated than it. You need many things to put together business, and finance is one of these things. But if you lack such resources, and want a bank to cover you, you might as well consider the risk before applying for a loan.

Traditional Loan

This is the first option whenever a businessman or startup needs funding. This loan is a big lump sum amount which is deposited into your account. It needs you to pay the lender monthly interest on theborrowed amount. Most of these loans have a low-interest rate, specifically when they have a collateral security.  However, traditional loans can be hard for new businesses to obtain. 

The lender will ask for a year track record first to evaluate your business. If your business has a healthy track record, then its good, otherwise you will have a hard time convincing them to trust you.  You may get a restriction on how to use the funds as some of these loans are limited to the following:

  • Working Capital
  • Renovation
  • Modernization
  • Buying Equipment

But before you apply for a loan, you need to consider the following risks!


You have to come up with an idea about what you are going to sell. It seems easy first, but if you fail to explain your product, you won't sell it. Instead of selling a product, you better sell a solution. Remember, people love buying stuff, but they hate being sold. So you have to work on having something worth offering. Otherwise, your business will slide down towards a disastrous part. 


Before you do anything, please research the local market. You need to invest a lot of time learning about your consumer, where they get their stuff, how they buy it, and how they use it. You have to perform a deep research, come up with a business plan, and execute it. Researching will help you learn about the market risks, and how to break successfully in your marketplace.

The Financial Dilemma

There are many tools available that aids people to make their dream a reality. Financing is always an issue with startups, no surprise, but it shouldn't kill your enthusiasm. If you don't see yourself landing one of the best business loans,  you can always get crowdfunding.

You have to set milestones for yourself and stick to a schedule.  If you articulate the business model, growth path and achieve your goals, it will make investors confident about investing in you.

Team Risk

There nothing such thing as a one man's job when it comes run a business. The first and most important asset of your business is a reliable team, and a leader. If it's your baby, then definitely you are mentoring everyone. So your team has to be good enough to bounce around some ideas, bring market, and maintain growth. If you lack a team you can trust your business with, then all your effort is doomed.


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