Every good business plan involves risk mitigation. Risks like products not working, the costs of the raw material spiking, or inflation. A good entrepreneur prepares for the worst-case scenario but keeps working to achieve the best scenario.
Only about 14% of the businesses in the country are woman-led. One of the reasons attributed to this significantly low number is risk aversion. Studies suggest women perceive risks differently and more harshly. However, this seems like an oversimplification of the matter so, let us understand where the risk aversion comes from.
l Conditioning
The world is changing, and glass ceilings are breaking, but most women still face the same challenges every day. There is still individual bias toward women's abilities in management or finance. The never-ending fight to prove their worth is exhausting.
l Work-work balance
Women seem to be doing amazingly well at balancing their careers and still managing to meet expectations at home. This means wanting to build a career means double the work for them.
l Resources
Most women do not receive the right financial literacy growing up. They either learn this from formal education or experience. This is the core reason behind their aversion to making big decisions involving money.
But, studies also suggest that women-led businesses are more likely to succeed and see financial prosperity.
A woman’s unique perspective, ability to multitask, productivity, collaboration, etc., make her a good leader. A country’s economy grows faster when women participate in it, and many women are proving that right now. So, if you are a woman who is starting her own business or is thinking of starting one, here is a guide that can help you create a strong business plan and assist in your success.
A risk mitigation plan should be at the center of your business plan. One way to achieve this is to list the factors that affect your business. Each factor should be studied, and risk mitigation strategies should be developed for each one.
A good approach to business plan risk mitigation is the 3(PM) - Product, Price, and People
l Product
Here is a table that will help start your inquiries.
Activity |
Factors |
Business Risks |
|
Manufacturing |
· Raw material, · Process, · Machinery, · Set-up, · Labour, · Storage |
· Costs · Handling · Permissions · Licenses · Trademarks · Labor · Storage costs · Environment |
· Machinery turning obsolete · Increasing raw material costs · High transport costs · Storage and handling difficulties · Theft · Permissions and licenses, · Loopholes in leasing, · Labor strikes · New laws · Health codes, etc. |
Services |
· Raw material · People · Set-up |
· Costs · Storage · Area of operation · People costs · Licenses · Permissions |
· Increasing material costs · Increasing rent · Wrong area (lowly populated, convenience issues, or less target audience, etc.) · Expensive licensing · Legal issues, etc. |
l Price
Price is often influenced by external factors. Understanding these would help create a risk mitigation plan. A business works hard to justify and set a price that the market is comfortable with. Any change is bound to disturb the business, so it is smart to preempt such changes and prepare for them for the foreseeable future.
l People
The employees make the business. Therefore, it is important to prepare for the risks they bring, such as human error, confidentiality breaches, churn, key personnel loss, and theft.
l Money
Every entrepreneur seeks funds to run their operations, these can be borrowed or raised through equity. Reducing financial risk is essential to reducing business risk. Increased interest rates, inflation, long credit periods, short-term assets built using long-term liabilities, and investors backing out are all examples of factors that should be considered in creating mitigation strategies to reduce business risk to the financial health of the company.
l Market
What is a business without its consumers? Its fiction. Women entrepreneurs should focus on changes in consumer behavior, market sentiment, macroeconomics, competitors, or any factor that can impact their consumers' buying decisions and/or purchasing power.
After identification, the next step is planning. Let's see what questions you should ask to reduce business risk.
· What factors can I control from the list?
Try to eliminate risks where possible, reduce risks wherever possible, and prepare for factors outside your control.
· How are other successful businesses controlling similar risks?
It is always a good idea to check how other successful women entrepreneurs reduce business risks. Always focus on early failures and how they managed to correct their steps.
· Who can guide me to mitigate business plan risks and make good mitigation strategies?
A mentor is a person who has done what you are trying to do or knows how to do it. They can be other women entrepreneurs or experts in their respective fields.
· Are there existing tools that can do this work for me better?
Just like we use technology to enhance our lifestyle, we should use it to ease doing business. Women entrepreneurs are often strapped for time, something that can be solved using the right tools. Technology can help create a better product, effective manufacturing process, faster reporting, consumer insights, marketing, etc. A smart entrepreneur makes technology work for them. Technological innovation can help reduce business risks.
· If I cannot control it, can I insure my risk?
Yes, there are many companies like Future Generali that offer commercial insurance with a wide variety of risk coverage. There are also women-centric coverage plans with HEALTH POWHER that will not only give you financial support for business risks, but also health and wellness. You can simply call 1800 220 233 to understand how to insure your business risks.
A useful piece of advice
To put it in a nutshell, women entrepreneurs can achieve everything with planning. Risk is unavoidable, so face it with conviction and preparation. Focus on how to mitigate risk, not avoid it. But you can always have a safety net with insurance.
Ayushman Bharat, launched in 2018, is one of India's most ambitious healthcare initiatives. It provides accessible and affordable healthcare to millions of citizens across the nation. A...
Read More
Are you giving your breast health the attention it deserves amid your busy schedule? Important, yes, but often overlooked amidst a busy schedule. Simple breast care and...
Read More
Pain and discomfort are indeed a part of the package of being a woman but they can be managed through information and medical help. Women's health awareness...
Read More
Menstruation is a natural biological process experienced by all women. And, as we all know, it is often shrouded in secrecy and stigma. However, understanding and maintaining...
Read More
Have you ever felt like your emotions are on a rollercoaster ride at certain times? It could be your hormones! Hormonal fluctuations play a powerful role throughout...
Read More
Migraine headaches are a prevalent neurological condition often characterised by intense throbbing pain on one side of your head, accompanied by nausea, vomiting, and sensitivity to light...
Read More
Bringing new life into the world is undeniably one of the most miraculous journeys a woman can embark upon. It's a profound blend of joy, anticipation, and...
Read More
Invisible yet insidious, air pollution is a stealthy threat that weaves itself into the very breath we take. It's a cocktail of harmful gases and particles that...
Read More
Water is the elixir of life. Yet, polluted water can steal the well-being of millions, particularly women and girls. The effects of water pollution are far beyond...
Read More
Starting a family is one of the best feelings in the world. Unfortunately, some women face challenges when trying to start a family. But why is that...
Read More
Section 80D of Income Tax is an important provision for claiming health insurance tax benefits for individuals and families (including Hindu Undivided families, i.e., HUF). It provides...
Read More
A zillion questions pop in the head as soon as you get the good news. What should I eat? What should I avoid? Work life balance? Should...
Read More
Regarding health insurance, top-up and regular health insurance plans are two prevalent options. While both provide coverage for medical expenses, there are some important differences. Regular health...
Read More
What is the Mahatma Jyotiba Phule Jan Arogya Yojana? The Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) is a health insurance policy run by the Maharashtra government...
Read More
World Cancer Research Fund Internation found around 18.1 million cancer cases globally in 2020. Of these cases, 9.3 million were linked to men, and 8.8 million were...
Read More
Picture this: It's a cosy Sunday morning, and you're curled up with a cup of coffee, scrolling through your social media feed. Amidst the clothing videos and...
Read More
In today's dynamic world, navigating the complexities of health insurance can be daunting for many of us. This is where HIPAA comes into the picture. HIPAA stands...
Read More
Women's mental health is a complex dance between societal expectations and biological changes. Societal pressures to be perfect caregivers and achieve career success can create overwhelming stress....
Read More
It is a relief when your period shows up on time, but sometimes you wish it came sooner rather than later. Sometimes, you are thinking, "How can...
Read MoreDidn’t find what you are looking for? Let our experts guide you.
