What risks are involved in starting a business and how can I minimize them?
September 29, 2023 | 50,00 EUR | answered by Martina Köhler
Dear tax advisor,
my name is Andreas Karpinski and I am planning to start my own business and establish my own company. I already have a business idea that I consider promising and now want to take the next steps to make it a reality. However, I am aware that starting a business involves risks and I would like to minimize them as much as possible.
I am aware that there are various risks that can arise when starting a business. These include financial risks, such as uncertainty about future income and expenses, as well as the risk of investments that may not bring the desired success. Legal risks, such as liability issues and contract negotiations, also concern me. Additionally, I am concerned about the competition in the market and the potential development of my company in a constantly changing economic situation.
I would like to know from you what specific risks can arise when starting a business and how I can best minimize them. What measures can I take to protect myself against financial, legal, and economic risks? Are there specific insurances, contracts, or strategies that can help me successfully establish and run my company?
Thank you in advance for your support and advice.
Sincerely,
Andreas Karpinski
Dear Mr. Karpinski,
Thank you for your inquiry and your interest in my consultation on starting a business. It is very understandable that you are concerned about the risks associated with self-employment. It is important to identify these risks and take appropriate measures to minimize them.
Financial risks are certainly one of the biggest challenges when starting a business. To protect yourself against these risks, it is advisable to create a solid financial plan. This includes creating a business plan in which you detail your income, expenses, and investments. This way, you can better assess whether your business model is viable and whether it is realistic to cover your expenses with your income. It may also be helpful to consult a financial expert who can assist you in creating your financial plan.
To protect yourself against legal risks, it is important to consider all legal aspects of starting your business. This includes choosing the right legal form for your company, creating contracts with customers, suppliers, and other business partners, and complying with all legal regulations. It may be helpful to consult a lawyer who can assist you with these legal issues and ensure that your company is legally protected.
In terms of economic risks, it is important to inform yourself about the market and competition. Get an overview of the competitive situation in your industry, analyze market trends, and adjust your strategy accordingly. It may also be helpful to exchange ideas with other entrepreneurs and learn from their experiences.
To protect yourself against financial, legal, and economic risks, various insurances can be helpful. These include, for example, public liability insurance, professional indemnity insurance, legal expenses insurance, and business interruption insurance. These insurances can help you financially in case of damage or a legal dispute.
In summary, it is important to thoroughly consider the risks of starting a business and take appropriate measures to protect yourself against them. Good financial planning, expert advice, compliance with legal regulations, and taking out insurance can help you successfully establish and run your business.
I hope this information is helpful to you, and I am available for further questions.
Best regards,
Martina Köhler
