Every business makes decisions and the reprocussions of those decisions have risks. Failing to manage the risks your business takes within acceptable levels can lead to the entire failure of your business. If your business really isn’t doing very well and looks like it is going under (9 out of 10 businesses fail within their first two years) then you want to have it fail as gracefully as possible.
1. Have A Disaster Plan
If your business is going to sink, make sure you don’t sink with the ship! If at all possible when creating your business make sure that it is incorporated and that you have a status of limited liability rather than unlimited liability. Limited liability means that if your business crashes it is treated as a separate legal entity – your personal belongings, your house, etc, won’t be subject to being reclaimed and sold to give investors the money they lost.
2. Have A Plan B
If your business looks like it is faltering, you should always have a plan B. You could borrow more money, raise prices, lay off staff, or find cheaper suppliers. In reality, however, most businesses choose to diversify where they...
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