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Risk assessment

How risky is your business... and how do you respond to risk? Take this risk assessment prepared by Minnesota Center of Rural Entrepreneurship (CORE) to find out.
Risk assessment
Some warnings about being in business

Once you are in business:
  • If you work on your own, it is difficult to get individual health insurance if you have any medical issues. You need at least two people to qualify for group health insurance (which does not require a physical examination).
  • It will be difficult to apply for a house loan because your business income cannot be verified.
  • Taxes can cause you to go in circles. There is a temptation to have as many write-offs as possible to lower taxes, but this will hurt you if you want a loan. Yet if you show high income, you have to pay about 40% of that income in taxes - which is difficult, especially if you are seeking a loan.
  • Taxes can shut you down if you fall behind in payroll taxes.
  • If you get disabled (for example: back injury), there is no safety net.
  • You are at the mercy of your customers' pay cycles. Cash is king - more than sales or profit.
  • Surviving while you grow to a sustainable level is tough. Your business is like a car going from 0 to 60 mph. At 60 mph, you know your business can make it. But you have to get there. Unfortunately, you have to pay taxes (about 40% of your profit) before you get there - so the journey is harder.
  • If you can't sell, find someone who can or don't go into business. Business success is all about sales and networking.
  • If you work alone, you may find yourself isolated, with no support, unless you go find it.
  • If you work at home, there is often no boundary between "work-time" and "home-time" and both can suffer.
  • You may be fighting the "status quo". Having a better product, even at a better price may not be sufficient to make a sale. Your customers have to be convinced to change their behavior and buy from you.