Mika
VIP Contributor
There is one truth about business irrespective of size (small, medium, or large businesses). The higher the investment, the more risk there is. In other words, if you invested $1000, your business will be in greater danger than the one that is financed with just $100. interestingly, the higher the investment, the more profits you make. Higher investment means you are producing more products or expensive products. Your profit margin will be bigger if you are selling more products or high priced products (a product that cost you a lot of money to manufacture)
While big businesses are built to huge investment funds and have the backing of big investors, they can easily manage the risk because they start losing money, they will pump more money into the business and market aggressively, produce better products and manage to build profits. However, as a small business owner, you do not have that leverage.
In order to manage business risk, you can do a number of things, such as reduce your running cost, get a partnership business, etc.
While big businesses are built to huge investment funds and have the backing of big investors, they can easily manage the risk because they start losing money, they will pump more money into the business and market aggressively, produce better products and manage to build profits. However, as a small business owner, you do not have that leverage.
In order to manage business risk, you can do a number of things, such as reduce your running cost, get a partnership business, etc.