How to reduce financial risk in small business

SMALL business makes the world go round - it’s the heart of the global economy.

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While starting your own business can be rewarding, it also comes with many risks.

 

And while these are all major financial issues, Founder and CEO of The Big Smoke, Alexandra Tselios, believes not having a realistic financial forecast is actually a small business owner’s kryptonite.

“The biggest risk to any company is running out of cash,” Alexandra says. “Having a realistic summary of what is likely to occur both in regards to sales and also cash flow will help business owners ensure they protect themselves, their staff and their company.”

An opinion leader in both Australia and the US, Alexandra started The Big Smoke in 2013. With the immediate success that came with launching an international opinion platform, also came Alexandra’s own financial learnings.”

“In my first year of my company, I had no financial forecast,” Alexandra says. “I was just so overwhelmed with the initial stages of business, that I wasted a lot of money.

“Fortunately, I always found a way to survive and ensure we were on a growth trajectory, but many strong businesses with fantastic concepts burn out really quickly just because they don’t have a solid grasp on how each activity impacts the bottom line of the business.”

Today, five years after launching The Big Smoke, Alexandra regularly commentates on a broad range of newsworthy topics including emerging technologies, the impact of social media, the importance of innovation and tips and tricks for startups and small businesses.

“A business partner of mine, who has run a number of successful companies, once said it simply - entrepreneurs usually have a lot to learn, but they run out of money by the time they truly figured out the lesson.

“Entrepreneurs need to commit to not only understanding their own business and product, but also, the climate they are operating in, so they can be sure to watch for lessons amongst competitors.”

Originally published as How to reduce financial risk in small business