You can be on Entrepreneur’s cover!

Smooth Sailing No startup is free from risk, but these five tips will help you put a plan in place to sail past any rough waters.

By Nichole L. Torres

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Though no business is free from risk and worry, there are a few ways to significantly lower the risk of typical startup hazards. Brad Forsythe, founder of Best Practice Advisors LLC in Milford, Ohio, and author of Bulletproof Your Business: Cutting Risk for Small Business Owners and Managers, shares his tips:

1. Focus your energies on what makes you the most money. This limits your risk in that you're not spreading yourself too thin. If you allow yourself to be pulled in a zillion directions, you take away from what makes you profitable in the first place. Don't let off-focus opportunities derail you from your main vision.

2. Don't build a business you can't finance. This is an issue that dwarfs other issues. Access to capital is vastly more important than anything and everything else. You've got to be very wise on how you approach your financing and secure as much startup capital as you can.

3. Think ahead. By establishing plans for dealing with production delays or problems with vendors beforehand, you'll be able to defuse these issues quickly, without hurting your bottom line. "There are simple things you can do within your own company," says Forsythe. "Once you put [your contingency plans] in place, they'll last for a long time."

4. Draft legal agreements. Have standard contracts like noncompetes and nondisclosure agreements on hand to deal with your three main liabilities: employees, vendors and customers. Getting everything in writing limits your liability in case things go sour (like an employee leaving and taking two other top sellers with him).

5. Don't fear risk--manage it. Managing your risks--that is, limiting your liabilities and general exposure--keeps trouble at bay and gives you the freedom to innovate. "You've got to take those risks to expand your market," says Forsythe. Hiding from all risks, even the innovative, invigorating kind, can cause your business to get run over--which is an even bigger risk.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

A Non-Profit Newspaper Published a Column Criticizing Facebook. Then Meta Blocked All of Its Posts.

Facebook's communications chief said that the posts were removed because of "a mistaken security issue."

Business News

A Look Inside the Company That Is Making $500 Million a Year Serving Italian Beef Sandwiches Made Famous by 'The Bear'

Portillo's CEO Michael Osanloo shares his secret to keeping hungry customers coming back again and again. (Hint: It requires a lot of napkins.)

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Elon Musk Reveals When Tesla Will Release Its First Robotaxi

Tesla's CEO says the fully autonomous Tesla taxi is arriving soon — in 122 days.

Business News

Walmart Shoppers May Be Eligible for $500 After Settlement

Walmart shoppers who purchased weighted goods or bagged citrus in the U.S. or Puerto Rico from late 2018 through early 2024 might be eligible for a share of a $45 million settlement.

Starting a Business

How to Start a Gift Basket Service

You've been complimented on your crafty and unique gifts for years. Turn your talent into a hot new business with a gift basket service.