| A very important factor in any real home based | | | | nowhere near the scandal that there would have |
| business is how you manage risk - yet it is a | | | | been if prices had risen. |
| factor that is often ignored by many work at | | | | Keep Staff Pay Aside. |
| home business. | | | | Whatever you do, make sure to keep staff pay |
| You have to realise that any time you start a | | | | separate from the other business finances, and |
| home based business, you are taking the risk that | | | | pay it out immediately if the business looks to be |
| the business might fail. Be realistic that it may not | | | | heading for trouble with its creditors. It is far |
| turn out to be the most successful home based | | | | better to be paying your staff on the last day |
| business. What experienced people do is shield | | | | than to be giving all that money to the creditors. |
| themselves from risk at every opportunity, to | | | | Leaving staff unpaid will destroy your reputation, |
| make sure that they can keep a business going | | | | not to mention hurting a lot of innocent people. |
| for months on the brink of disaster, and wind it | | | | The 'Closing Down' Sale. |
| down gracefully if it really has to go under. | | | | If you plan it well, your last day in business might |
| You need to have a plan for what you're going to | | | | not be so bad. Just make sure everyone knows |
| do if your business looks like it's going bankrupt. | | | | that you're closing down for real, but still price |
| Are you going to borrow more money, if you | | | | everything ever-so-slightly above cost. In this |
| can? Sell your car? Raise prices? Get rid of staff? | | | | way, you can avoid the drastic loss-making |
| Done right, you should have a good package of | | | | 'Everything Must Go!' mentality, and come out of |
| 'rescue measures' that really do have a chance of | | | | your business the same way as you would if |
| rescuing the business. | | | | you'd decided to shut it down that day for some |
| Borrowing. | | | | other reason. |
| If you need to borrow more to keep your | | | | Selling Your Business On. |
| business afloat, take great pains to avoid looking | | | | If you're shrewd about it, you might be able to |
| desperate. Act like your business is moderately | | | | keep your business going long enough to sell it to |
| successful but needs more investment, and you're | | | | someone who could turn it around, perhaps to be |
| far more likely to succeed in getting more funding. | | | | the most successful home based business. |
| Bye-Bye Staff. | | | | There's nothing dishonest about this route - it's |
| This is a bad idea, but not always a terrible one. In | | | | the one most big companies take if things start |
| a work at home real home based business, you | | | | to go wrong. You might even find that one of |
| presumably only take on staff because you have | | | | your competitors is willing to buy, even if only for |
| enough business to cover it, don't you? So it | | | | your established customer base. |
| makes perfect sense to get rid of the staff | | | | It's Up to You. |
| when things start to go wrong and go back to | | | | Disaster plans are very personal, and they depend |
| doing it all yourself. | | | | a lot on how much risk you're willing to put on |
| Price Hike. | | | | yourself. If you do things the sensible way, then |
| When your business is in trouble, there are few | | | | you'll go as far as you can to avoid selling or |
| things guaranteed to destroy it faster than a price | | | | borrowing against any of your own assets just to |
| rise. Just don't do it, however tempting it might be | | | | keep a business afloat. On the other hand, if |
| - cut costs instead. If you absolutely must raise | | | | you're really determined and a bit of a risk-taker, |
| prices, do it by scaling back what you get for | | | | putting some things of your own at stake might |
| your money in each of your price ranges, without | | | | buy you enough time to recover from whatever |
| actually raising the prices. | | | | hit your business. |
| I know of a struggling bus company that kept its | | | | It's a little like playing poker: are you going to be |
| fares the same for years but gradually started to | | | | the guy who walks away and leaves his money |
| run fewer buses and send them all over town, | | | | on the table, or are you going to throw your car |
| making journeys take longer. People reacted a | | | | or house keys onto the table and raise the |
| little badly to the longer journeys, but it was | | | | stakes? That's risk management for you. |