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Tag: Managing Risk

  • 7 Steps to De-Risking Big Business Decisions Before They Backfire | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    When the pressure is on — a new market, product launch or high-stakes pivot — it’s easy to rush past the steps that could have saved you from failure. Despite the volumes of books and case studies on how to make better decisions, many leaders still repeat the same mistakes. These seven steps are designed to cut through the noise and help you de-risk big decisions, no matter your industry.

    1. Remove bias before it wrecks your strategy

    Even the most innovative companies make irrational calls because they skip the hard part: eliminating bias. Groupthink, overconfidence and confirmation bias quietly sabotage good ideas — and major decisions get made based on ego instead of insight.

    The only real antidote? Data. And lots of it. Whether you’re restructuring your team or launching a new product, let data challenge your assumptions. Use tools like the AEM-Cube for internal shifts and lean on Design Thinking for customer-facing initiatives. Bias isn’t always obvious — but its costs always are.

    Related: The 5 Step Process To Identify Risk and Improve Decision-Making

    2. Get closer to the right customer with the right research

    Too many decisions are made in boardrooms, far removed from the people they affect. Metrics and dashboards are useful, but they don’t replace real customer insight.

    Most companies think they know their customers. Few actually do. Build detailed personas, map the full customer journey, and invest in ethnographic research. For internal decisions, your “customer” might be your team. If your employees don’t feel heard, seen or aligned with your mission, even the best strategies will collapse under cultural resistance.

    3. Test fast before you go big

    Once you have a strategy, pilot it quickly and learn faster. Build small experiments, run A/B tests, define your offering clearly, and measure everything — from product fit to pricing, UX to delivery.

    Let real customer behavior — not internal assumptions — guide your next steps. Pilots aren’t about proving you’re right. They’re about learning what works.

    4. Tie decisions to real incentives

    Too many change initiatives fail because they ignore human motivation. If you’re not aligning incentives with your new direction, don’t expect people to get on board.

    Start with clear internal communication. Then build in feedback loops, transparent compensation structures and tie your mission to purpose-driven rewards. Change without buy-in creates friction. Buy-in without incentives creates apathy.

    5. Make sure your capacity can keep up

    The right idea in the wrong structure is a guaranteed failure. If your systems, people, or tech can’t handle the growth or change you’re aiming for, capacity will break before the strategy does.

    Run stress tests. Evaluate your infrastructure, team readiness and internal workflows. Ask: Can we execute this at scale, or are we just excited by the concept?

    6. Stick to a customer-centric strategy

    Even great decisions go off the rails without early warning signs and course-correction plans. Identify the signals that indicate a pivot is needed — and stay close to your customers post-launch.

    UX research doesn’t end once the product ships. Keep mapping how real users engage with your offering, and adjust accordingly. Consistency with your core personas is your best safeguard against drift.

    Related: 7 Tips for Making Quality Business Decisions

    7. Disrupt yourself before someone else does

    If your strategy works, expect competitors to follow. They’ll try to copy your product — or poach your people.

    Stay ahead by regularly asking:

    • How would someone disrupt us?
    • What would it take to replicate our edge?
    • Where are we most vulnerable?

    Then take small steps to disrupt yourself before anyone else does. Build a culture of reinvention, not complacency.

    Final thought

    Smart leaders don’t wait for a crisis to think clearly. They build decision-making processes that are bias-proof, customer-led, and test-driven. Whether you’re launching a product or reshaping your org, these seven steps help ensure your bold moves aren’t blind ones.

    When the pressure is on — a new market, product launch or high-stakes pivot — it’s easy to rush past the steps that could have saved you from failure. Despite the volumes of books and case studies on how to make better decisions, many leaders still repeat the same mistakes. These seven steps are designed to cut through the noise and help you de-risk big decisions, no matter your industry.

    1. Remove bias before it wrecks your strategy

    Even the most innovative companies make irrational calls because they skip the hard part: eliminating bias. Groupthink, overconfidence and confirmation bias quietly sabotage good ideas — and major decisions get made based on ego instead of insight.

    The rest of this article is locked.

    Join Entrepreneur+ today for access.

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    Adam Horlock

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  • Don’t Let These Myths About Entrepreneurship Hold You Back | Entrepreneur

    Don’t Let These Myths About Entrepreneurship Hold You Back | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Becoming an entrepreneur is one of the best ways to build wealth. Yet far too many people let fear or misperceptions about starting a business keep them from investing in their futures in this way.

    It’s time to dispel some of the myths about entrepreneurship that are holding people back.

    Myth #1: Starting a business always comes with a lot of risk.

    Truth: You have more control over risk than you may think.

    If you didn’t grow up with entrepreneurial parents, chances are you grew up believing that starting a business is far riskier than working for someone else.

    Many people are taught from a young age that a job with an established employer that offers health insurance, a 401(k) plan with an employer match and paid time off is “safe.” But that’s not true. You can perform well in a role with an established company and still lose your job with little to no warning. In recent months, there have been plenty of news stories about thousands of employees with some of the biggest companies in the U.S. waking up to discover they’re out of work.

    How does this compare with the risk of working for yourself? If you start a business with only one client, it’s similar. If you build a robust and diverse list of clients instead, you begin to bring that risk way down.

    Remember that when you are an employee, you have a single client. When you are in business, you have many clients, so if one client fires you, you are not out of business.

    The key here is to grow your business as quickly as possible, from zero clients to a diverse client base that generates at least as much income for you as your full-time job. How do you do that? Educate yourself on your business. The more you know about investing in a business and the specific industry and market for your business, the more you’ll be able to minimize your risks.

    Does starting a business come with risk? Of course. But you have a lot more control over that risk than you think.

    Related: 4 Myths About Entrepreneurship You Need to Stop Believing

    Myth #2: Starting a business is expensive.

    Truth: The government will pay you to start and grow your business.

    This myth stops a lot of would-be entrepreneurs in their tracks. Many people have the desire to start a business and a great idea of what that business would be, but let fear of the start-up costs prevent them from taking even the smallest action.

    If that’s you, instead of making assumptions about the costs, get the facts instead. Invest some time into creating your business plan, including an assessment of the start-up costs. You’ll also want to have a good handle on what revenue and expenses you’re likely to see in the first year of operation.

    The cost structure of your business will vary greatly depending on the industry and nature of your work. Thanks to technology, you can start many businesses with very little up-front capital. But don’t immediately rule out a business idea if these initial costs seem large.

    Governments worldwide have created financial incentives for people to start and grow businesses that can offset many of these costs. Business owners can access some of the best tax credits and deductions. In fact, most of your up-front and first-year business expenses are deductible, including:

    • Equipment
    • Rent or capital to purchase a location (or your home office)
    • Staffing costs
    • Legal expenses
    • Marketing

    If you anticipate operating the business at a loss in the first year, don’t despair. That’s common in many business models, and the government offers some assistance here as well. Losses from the business can offset other income, such as interest, dividends or a spouse’s wages.

    Related: Considering a Government Program to Support Your Startup? Here’s What You Need to Know First.

    Why do governments offer these incentives? Because they want more people to start and grow businesses that create jobs and provide goods and services to their community. A thriving private sector helps keep the population happy and secure. Governments see so many benefits from entrepreneurship that they offer a host of tax credits as additional incentives. Depending on the type of business you start, the location you select and the workers you employ, you may be eligible for credits that directly offset the amount of tax you owe dollar for dollar. Common business tax credits include credits for:

    • Creating jobs in economically distressed communities.
    • Hiring people from targeted groups that have faced significant barriers to employment.
    • Offering a qualified health care plan to employees.
    • Providing paid family and medical leave to employees.
    • Research and development.

    Myth #3: I’m too old to start a business.

    Truth: If you’re over 40 and starting a business, you’re in great company.

    You’ve heard many stories of successful entrepreneurs who started their companies in their college dorm room or parent’s garage. And starting a business early in life — before you have the responsibilities of raising children or caring for aging parents — has a certain appeal.

    But it’s not too late if you didn’t take the entrepreneurial plunge in your 20s or 30s. A recent study of more than 2.7 million entrepreneurs found that the average age of successful founders was 42, and the average age of founders of the fastest-growing companies was 45. And that’s the average, so plenty of people have successfully launched companies in their 50s, 60s and beyond. Colonel Sanders didn’t perfect his fried chicken recipe until he was 50, and he was in his 60s when he first franchised it, creating Kentucky Fried Chicken.

    Embarking on business ownership after establishing a career means you can bring more experience, and potentially more capital, to your venture. You also may be able to start a business while maintaining your current employment. As long as your business doesn’t create a conflict of interest and your schedule allows it, starting a business on the side can be a great option. It opens up the tax benefits of business ownership while maintaining your current salary, giving you a great on-ramp to launch your new venture.

    If you or someone in your life has been thinking about starting a business, now is the time. Debunk the myths and get started today.

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    Tom Wheelwright

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  • 3 Risks That Come With Rebranding — and How to Overcome Them | Entrepreneur

    3 Risks That Come With Rebranding — and How to Overcome Them | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Rebranding is not an effort to take lightly. There’s no shortage of brands that got the wrong kind of attention after changing up their logo (remember Airbnb?) or their name (hello, Meta).

    And while a healthy dose of fear is a good thing going into a rebrand (to keep from embarking on the effort frivolously), it shouldn’t paralyze you from making much-needed decisions or taking confident action either.

    Having just recently rebranded ourselves, complete with a new logo and a new name, trust me … I get it. Here are some of the biggest risks we faced during the process and the ways we got around them in the end.

    Related: Does Your Company Need A Rebrand? Here’s Why, When and How You Should Do It.

    Risk: Loss of brand equity

    This is a common one, even for companies that have only been around for a short time. Losing what little recognition you’ve achieved feels like a huge void. Customers need re-educating. Employees need retraining. It’s by far the greatest risk you’ll face.

    In our situation, the risk was twofold. We had spent the last few years acquiring a number of other companies in the relationship-marketing space to build an integrated full-stack solution. That meant we were rebranding not only the name of the umbrella company that acquired all these brands, but we had to reposition each of them individually under the new, combined entity.

    The first part wasn’t so hard, since the umbrella company doing the buying wasn’t a strong brand to begin with. It was just a placeholder as we built our strategy through acquisitions. So, changing from CM Group to Marigold wasn’t a huge risk.

    Far more challenging was how to reposition the multiple companies underneath it — each with its own customers, employees and existing marketing and messaging in the field. In particular, the employees of each company were tied both professionally and emotionally to those brands, and upsetting that carries its own risks.

    Our solution was to keep the names of those solutions but reposition them as services offered by the parent brand Marigold — “Cheetah Digital by Marigold” or “Sailthru by Marigold,” for instance.

    This “endorser strategy” allowed us to keep all the familiarity and brand equity each service has gained over the years but present them in a new light as part of a suite of services that are even more valuable when offered together — greater than the sum of their parts — and promote Marigold in the process.

    Related: 4 Tips for Launching a Successful Rebrand

    Risk: Upsetting company culture

    Let’s face it, a rebrand is a disruption to the day-to-day business of running a company. Those most affected are often not involved in the decisions made about the brand either. So, employee confusion, resistance and resentment are very real fears.

    We were highly sensitive to this fact given the number of companies we had acquired. We didn’t just combine different technologies and services through the process, we acquired different cultures, leadership teams and histories.

    But part of blending different companies under one banner is the need to establish a new culture that all can share. Again, we needed to create something that was more than just the sum of its parts. It had to retain everything that existed before, as well as add something new and useful to all.

    In short, it shouldn’t feel so much like a change as a natural evolution.

    We did this by communicating the rebranding strategy to all parties before launching externally. This was done in thoughtful stages to ensure the right employees were informed and consulted at the right phase of the process. While, of course, what resulted likely didn’t reflect the opinions and expectations of everyone, we felt it was important that all were heard, valued and informed.

    Then we evangelized it company-wide, using the process to bring together these formerly disparate teams into a new common ground.

    Related: Important Lessons I Learned From a Rebrand

    Risk: Alienating customers

    Changing the name or functionality of a product or service that customers use is kind of like rearranging the furniture in their house without asking. So, when you make the big reveal, you want a positive reaction. We decided to notify our customer base about the branding changes before the press release went out. That way, they heard it from us and not a surprise in the press.

    As part of this process, it’s critical when the new brand is unveiled that you emphasize all the ways this new development will help THEM. Remember, a rebrand is not about fancy new logos or juiced-up marketing language. It’s about establishing an idea and an expectation with the people who will make or break your business. If you’re not rebranding with the customer first, it’s a massive risk.

    Our goal was to use the rebranding effort not just to reintroduce our company and services, but to really use the rebrand as a way to hit reset on the entire industry we serve. Why did we acquire all these companies and integrate their functionality under one banner? Because the business of marketing has changed fundamentally, and a new kind of relationship-marketing solution is needed to support it adequately.

    Make your rebrand less about you or what you want from the industry, and instead make it about the unique value you bring to your customers, moving forward like you’re rebranding an entire industry. Set the tone. Change the narrative. Define the space you operate in, and emerge as the new leader by default.

    So, yes … rebranding is risky. But given the right set of market forces and company evolutions, not rebranding can be even more so. As long as you’re honest with yourself about your intentions and use rebranding to solve the problems both you and your customers share, it’ll likely have a positive result for all.

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    Michelena Howl

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  • Alec Baldwin Just Learned Something Every Business Owner Already Knows

    Alec Baldwin Just Learned Something Every Business Owner Already Knows

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    Opinions expressed by Entrepreneur contributors are their own.

    By now you’re familiar with the ongoing saga of Alec Baldwin and the tragic shooting accident of a cinematographer on the set of his film “Rust.” Earlier this month, Baldwin was charged with involuntary manslaughter in Arizona, the state where the incident occurred, and faces up to 18 months in prison if found guilty. This is an awful situation. But it’s also a reminder of the liabilities we all face as business owners. Because, as a producer of the film, Baldwin was a part owner of the enterprise. And with that great opportunity for profit also comes great responsibility.

    And these responsibilities extend to all areas of our businesses.

    For example, as a certified public accountant, I’ve signed tax returns for clients in the past. And, even though I do have both professional and legal requirements I must fulfill, in the end, a company’s tax return is the responsibility of the company’s owners. If, like most small businesses, your business is owned by yourself or maybe with a partner or two any problem, error or issue with your tax return is ultimately on you. Even if you were unaware of an omission (or a commission) you’re still responsible for it. You can’t just blame everything on your accountant. Your signature is on that return. You own it and you’re liable — both civilly and even criminally — if there’s a significant error. So read your return. Ask questions. Know what you’re signing before you sign it.

    Related: Does Your Business Put You at Risk of Lawsuits?

    The same goes for mistakes made by your employees while on the job. If an unsuspecting bookkeeper accidentally runs over a puppy on the way to make a bank deposit or pick up a package during company hours then this is going to be your problem. If a service technician makes an inappropriate comment to a customer out in the field you’re going to hear about it. If your delivery driver sideswipes a parked car that obligation is yours. If someone slips on your walkway, that’s going to be your responsibility too. This is why insurance exists. And the claims aren’t getting any smaller in this ever-growing litigious environment. So meet with your insurance advisor regularly and make sure your coverages are appropriate.

    Unfortunately, being associated with an unpopular influencer, a controversial event or a marketing campaign that goes south is also your fault. Pepsi didn’t expect the backlash it received when the company launched a campaign featuring Kendall Jenner, who offered its product to a police officer at a protest as a peace offering. Adidas came under fire when congratulating customers who ran in 2017’s Boston Marathon with the slogan, “Congrats, you survived the Boston Marathon.” Other brands have been accused of racism, colonialism and other transgressions as a result of their misguided marketing campaigns.

    But it’s not just the big brands — and their shareholders — who suffer the consequences of their actions. There are plenty of small businesses that make these mistakes. And for us, because of our size, the repercussions are more severe.

    A Dallas restaurant chain caused controversy when it implemented a surcharge for employee benefits. The owner of an Italian restaurant “sparked outrage” after a Facebook post. Another business owner was slammed on social media for trying to scare off a homeless person with a hose. There are countless other stories of small businesses that suffered the wrath of Twitter and Facebook for their actions or the actions of their employees — this includes taking a position on a controversial social issue and losing customers as a result or even being forced to shut down because of it.

    And there are countless other stories of business owners who, by trusting too much, had funds stolen by office managers, accountants, employees, financial executives and bookkeepers. Maybe they had insurance. Maybe they didn’t. But no insurance is going to cover the lost time and the anguish of such a loss, let alone the public humiliation of having to admit to the world that by your lack of internal controls you’ve been had. And then there is the countless number of small businesses — most of them unreported — that have suffered significant losses of data and face enormous lawsuits from angry customers thanks to their poor network security that resulted in breaches and ransomware attacks. You need insurance for all of this too.

    But the answer isn’t just insurance. It’s internal controls. It’s management participation. It’s care and attention to detail and scrutiny and involvement and all the other things that a business owner must do in order to minimize their potential exposure to liability. Alec Baldwin, unfortunately, didn’t check that the gun he was using in a make-believe scene contained make-believe bullets. Maybe that was an honest oversight. Maybe he should have been more diligent. Regardless, he’s the owner of the movie-making production so he’s on the hook.

    As business owners we take risks. Substantial risks. It’s what separates us from employees. An employee can walk away from a job anytime and just get another job. But the owner of a business can’t do that. We must meet obligations and are exposed to both financial and legal repercussions for the decisions we make. Let’s never forget that.

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    Gene Marks

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