How To Minimize My Risk
I had the great good fortune to have gotten an introduction through my friend Sharon to a wonderful, astute and experienced business consultant. Thus I met on Friday with Jill Johnson, founder and president of Johnson Consulting Services. As a marketing and management consultant, she is a specialist in strategy and planning, and in the business of doing research and analysis of critical data to help business managers make sound business decisions. Needless to say, the time I was able to spend talking to her about my business plans was a GIFT of immeasurable worth.
She spent a lot of time talking about minimizing risk. As I am about to enter the development phase of the product I hope to sell, she made it clear that I have more work to do before I start this phase. If I can get information NOW about whether I’ll be able to proceed AFTER product development, I will be able to make better decisions.
To get the critical information I need, I left our meeting with 3 jobs to do:
Job #1. Continue to meet with the SCORE counselors I’ve been seeing. They have many years of experience. Ask them their opinion of the product development proposals I’ve received.
Job #2. Visit 3 commercial lenders and explain to them about the business I’d like to start, tell them I’m working on my business plan, doing my due diligence, and about to enter into product development. I need to ask them, “What can I do NOW to make sure I’m eligible for financing LATER, when I’m ready to start the manufacturing phase of my business?”
Job #3. Do more research on the specific retail market closest to my product. Get every bit of information possible in relation to that, and similar markets.
Jill’s reasoning is absolutely spot-on. I can minimize my financial risk by doing these things now. On the down side, if I talk to the bankers only to find out that there’s no way they’d lend money for my manufacturing enterprise, well then I’d better find it out now before I spend the money on development. A better scenario would be to find out that I need to do A, B and C before they’d consider giving me a loan. If it’s doable, then I can be confident that I’m not throwing my money away to get ready for manufacturing, and I will know exactly what I need to do to proceed after that. Either way, I’d much rather find out before I spend the money whether I have any likelihood of seeing the whole thing through!
I’ve done a lot of research, but still I haven’t done enough. I have to arm myself with a lot more information to prove the market for my product. Not only to convince others – like bankers and buyers – but to prove to myself beyond doubt that there really is viability to my business idea. Make no mistake, I will be in this to make money, and if it doesn’t look like I can, I will not proceed. Like Jill and I joked, I may write a post someday titled, “10 reasons why I WON’T be starting a business!” Once again, better to minimize my risk by finding some answers out now rather than after I’ve spent thousands on a dead-end project.
I cannot thank Jill enough for the insights and advice she gave me. I cannot thank Sharon enough for the introduction to Jill. I remain positive about my business, but I’m fully prepared to work harder to prove it. And I really hope that if there are any other entrepreneurs reading this blog, they can benefit from what I’ve learned; do your utmost to minimize your financial risk before you begin by researching every aspect of your business to prove its viability.
