Others may choose not to launch or grow their business for fear of the risks involved: these are the people who will as a consequence never reach their true entrepreneurial potential.

But there is an alternative, third option: minimising the risks to successfully navigate business challenges.

Almost half of those who have identified a good opportunity will not start their business due to the fear of failure, according to Global Entrepreneurship Monitor. That represents a huge number of people for whom success might have been possible, if only they had been confident enough to mitigate the risks associated with launching their business, down to a level that they were more comfortable with.

Still more people may start their business but stick within a ‘safe’ zone, offering the same products or services rather than seeking to expand, innovate and reach their full potential.

Yet, there is an alternative.

Starting and then growing your business is likely to be associated with a level of risk, whether those are tangible risks such as the money put into the venture, or intangible risks such as the reputational damage if something goes wrong.

What most successful entrepreneurs have done is identified those risks – at each step of their growth journey – and then mitigated as many as possible, to bring them down to a level that they (and any potential investors or co-founders) are comfortable proceeding with.

What are the risks?

Business risks across any sector can be broadly split into five categories: market risk, entrepreneur/team risk, financial risk, legal risk and operational risk.

If there are too many, then not only does this increase the chance of project failure, it also reduces the chance of investment (87% chose not to invest because a project had too many risks, compared to 7% who did not because the project had low return potential – EBAN).

When it comes to an existing business that you want to expand, you are at a distinct advantage compared to a new entrepreneur if you already operating within the sector. That makes the sort of consumer research which should be undertaken to check if there is a market for the new project much easier, as well as you already having an insight into distribution channels, market size, and your competition.

But of course, the additional products or services offered as part of the growth strategy must still tick all the boxes for consumers (whether a B2B or B2C business): adding value or solving a problem, as well as balancing price and quality.

One great way to minimise risk when it comes to expansion is offering a select number of existing clients the opportunity to try your new products or services for free, in return for their honest feedback. This may even secure you orders before you have fully launched the new project.

Teams and technology – mitigating the risks

When it comes to the entrepreneur and team risk, it may be that your existing business contains all of the people needed in order to successfully supply your products or services. However, this needs a careful reassessment when it comes to any new project. Is it outside the scope of the existing team’s skillset? Or is the additional work involved over and above the current capacity you have within the team?

Again, rather than either letting this deter you, or blindly ploughing on without considering this element, there are ways to mitigate this risk. This could include hiring new staff; comprehensively training existing staff; outsourcing an element of your business operations; or even having an agency on hand to supply temp staff for particularly busy times.

Finances are likely to be a key concern for most business owners – and rightly so; cash flow must be maintained in order to keep a company soluble. The good news is, if you already have the equipment and space you need to run your business, then the start-up costs for your new project are likely to be lower. However, there are also options to consider, from licencing your offering so someone else produces or sells it on your behalf, to franchising your concept.

A helping hand from AI

One of the advantages entrepreneurs of today have is all of the newly-emerged technology which can assist with growing and launching a business. Used well, AI can be a fantastic asset, with a range of tools designed to support the launch of new projects, as well as day-to-day operations.

AI can not only help identify business risks, it can also identify solutions to help mitigate at least some of these risks. Other tasks can include creating pitch decks to attract financial investment, generating draft contracts (although these should always be double-checked by a legal expert), identifying consumer behaviours and trends, and financial forecasting.

Final thought

As the famous saying goes, if you do what you have always done, you’ll get what you’ve always got. This means without action you will not be able to grow your business beyond its current limits. Having done all of the hard work to launch initially, moving to the next level is absolutely possible – as long as you identify the risks involved, use all of the tools (and people) at your disposal in order to mitigate them, and then move forward knowing that you can accept the level of risk you are taking. That’s how you reach your full potential.