Risk and Compliance [Funding Your Business]

Understanding on how to measure risk is crucial.

Knowing how to mitigate risk effectively is the key

I'm sure you'll agree when I say that - when it comes to putting your own money in a deal or transaction, the first thing you'd want to know is how you would be protected.

Sure, perhaps thinking of how to grow your money is something that simply can't be ignored. However, growth means nothing if risk is evident and inevitable.

The same can be said about an investor or lender.

Over the years, the Securities and Exchange Commission along with other investment industry authorities have done their best to analyze and report fraud across all channels when it comes to fund placement or simply directly investing into something.

For business owners, this is an important resource.

A - Review and analyze any parts of your transaction to make sure that it is fully compliant

Unless you practice securities as a lawyer, you need to be prepared to retain or at least consider hiring an expert who will guide you through the compliance steps to get your business ready for investment.

The S.E.C is constantly monitoring businesses and those entities that are seeking investment capital need to follow the different filing requirements when it comes to approaching investors.

Penalties and fees occur even if it was unintentional. Make sure you're protected from the get go.

B - Have a third party validate the risk criteria of your business

Perhaps it's not the most attractive thing, yet, having a third party who is credible when it comes to risk analysis is something that can't be ignored in today's times.

Investors look for cues that allow them to feel more comfortable and confident in making a decision on whether or not they feel like moving forward with a deal.

I've come across so many businesses who hire their own "staff" or someone they know to create a risk assessment. Albeit that the person in question may be competent and qualified to write the risk disclosures, I still highly recommend having a third-party who is neutral to both sides of the transaction.

C - Constantly educate yourself when it comes to your niche

This may be something that most entrepreneurs and business owners don't think about. And, often, when presented with challenges, having the right knowledge may be the key between success and failure.

As a business owner, you have different goals. As part of those goals, you have the obligation to adhere to certain rules and principles that will act as a guiding light for you. Make sure that educating yourself constantly in your niche is part of those golden rules and principles.

Nothing bad ever comes of knowledge. And, if that knowledge be applied in the right areas, it has the capacity to help you grow your business tremendously.

In Summary

Risk is something that you constantly need to think about. It is your sole responsibility to know on how to mitigate that risk with the appropriate education, knowledge and experience. And, if you feel stuck, help is not far from reach - given that you're open to feedback and are willing to call for help.

Be sure to constantly network out there and connect with valuable players in your industry. The sheer resources that you'll build overtime is something that no money can buy.

#business #funding #compliance #education #entrepreneurship