The start-up industry is growing at breakneck speed. Most entrepreneurs are so excited about starting their own businesses that causes them to overlook the numerous risks that their companies might face on a daily basis.
When we talk about the start-ups, they are more vulnerable to threats like market, financial and data security risks.
The young and innovative start-ups are all together a different breed. They need to be goal-oriented, passionate, self-motivated, be able to handle uncertainty, think out of the box, be adaptable, open to chances and have the courage to undergo third party assessments to get a reality check at the right time.
Some of the mistakes can prove really costly given the fierce pace at which start-ups are scaling up. Hence, multilevel assessments are a must to minimize the risk of failures at advanced stages. So, the startups should use an Assessment tool.
The reason why more than 50% of the start-ups fail within the first few years is lack of proper assessment and risk management strategies drawn out of thorough assessment done by experts.
Thoroughly assessing one’s risk environment can help start-ups plan in advance and implement strategies towards minimizing such risks.
Furthermore, assessment tool helps the start-ups approach the funding agencies with proper short and long-term plans.
Ashish Jain, Co-Founder, The Start-up Board, says, “Start-ups founders work in the space that is most likely alien to them, which means, either they have not attempted a similar work earlier or they are innovating in the absolutely new space. Due to this, it is important to take the feedback to do course correction.”
Investing in early-stage companies is a risky business. The venture capitalists have understood that before backing a start-up, it is important to conduct a thorough risk assessment of the company. Only after adequate due diligence has been performed, the venture capitalists become comfortable about their investment decision.
One of the vital prerequisites for valuations of any company or making investment decision is assessing each of the soft factors carefully which again comes with its own set of challenges like finding the right criteria, evaluating through the right method and getting on board the right mentors.
The Startup Board (TSB) is a digital platform for entrepreneurs and has set a target to support about 5000 startups in a year for the next five years by connecting them with mentors and investors seamlessly.
Ashish, who always believes in the mantra – Fail Fast or Succeed Fast, believes, “Assessment is a structured way to sit with someone who knows similar (may not be same) space and can give insights based on the experience and perspective assessors possess.”
The Start-up Board
has been doing two things to grow their presence– one, accelerate the failure or growth of a venture and secondly, create technology tools and templates for universal usage by founders to get guidance on their venture.
With this endeavour, The Start-up Board is coming up with an assessment tool ‘myBizScore’.
Ashish says, “myBizScore" is an assessment engine that The Startup Board is bringing to undertake assessment for the ventures in an unbiased manner, with consistency in assessment and input quality. Mentors who join initially to do the assessment are sourced from around the world. Most startup founders feel they know everything and many fail for that attitude. Assessment tool will help founders to undertake assessments at different stages repeatedly to get insights, without the hesitation to reach for feedback. We are democratising the mentoring in a structured way.”
Many successful start-ups now extensively use assessment tool to mitigate the risk of failures at any stage. Because unlike the large companies the start-ups can not afford to make mistakes at any stage.
The four main components of risk assessment are:
1. Identifying the risks that your start-up faces including - market, data security, financial, management, etc.
2. Analysing the impact of each type of risk identified.
3. Evaluating how your current resources and expertise can deal with the most significant risks you face.
4. Make short-term and long-term growth plans with proper planning to overcome the risks.
Before putting in money or more money into a business, the top priority must be to understand the risks and feasibility of going ahead with the current business model.