By John Meyer

For every startup, there is no ignoring or avoiding risk. Risk comes in many flavors, and entrepreneurs must harness it as an ally rather than battle it as an adversary. Risk-aversion is not in the entrepreneurial tool kit as it is unavoidable, and success is predicated on managing risky situations by moderating risk at countless different levels.

To make the understanding of risk a bit easier, the overall concept can be broken down into four sub categories, each with its own considerations and nuances. Take a careful glance at all four, and begin evaluating areas where you may excel, and where you might need to improve.


The most obvious of the quartet, financial risk is a broad topic, and encompasses considerations from cash flow to payroll to R&D. No matter the size of your startup, addressing financial risk with a well-thought out strategy is vital. Know the economic risks you face on a regular basis, and have operational plans in place to deal with the expected and unexpected. Though the adage “Nothing ventured, nothing gained” succinctly sums up basic risk taking, it says nothing about being smart when venturing — and being smart about risk is the key.


There are numerous legal risks that a startup faces, all coming to bear on the owner/operator. Compliance risk can often be mitigated with the help of a good attorney and accountant. It can be a difficult task to manage overall compliance with entity requirements and stay current. Whether you are dealing with incorporation issues or tax liabilities, compliance with sundry laws is non-negotiable … such considerations are the purview of financial and legal experts, and may not be within your own scope of entrepreneurial expertise. Find a qualified entity to handle your compliance needs, and you will be worry, and risk, free. One option to consider is a resource such as Compliance Watch, a tool offered by The Company Corporation that sends alerts business owners when a compliancy filing is due and neatly groups pertinent documents together for easy access.


Once you are your own boss, the buck literally stops with you. That also goes for any employees on your payroll. Are you versed in the logistics of a 401K plan? Do you know the latest intricacies of FICA deductions? If not, then you need to address the various employment risks that your start-up currently faces. As with compliance risk, this may be an area that requires a dedicated accounting or legal specialist. Find a strong employment lawyer or firm to represent your interests, and sleep well knowing that you have taken the steps to minimize employment related risk factors.


It can be a frightening proposition knowing that an entrepreneurial venture exposes you and your business in the public forum for all to see. There is a sizable reputation risk associated with being visible in the marketplace … personal reputation, and professional reputation. Now, with the widespread use of social media as a business tool, the entire tech world can positively or negatively contribute to your reputation, often in real time. That reality may not be fair, but it is a fact. With such high visibility impacting our individual and collective moves in everyday commerce, it is essential for start-ups to place extraordinarily high values on customer service, fair dealings, and providing quality goods/services. Remember being told as a child the importance of developing a good reputation? That advice is truer now than ever before.

Be mindful of the risks you stand to face as an entrepreneur. These four major adversaries aren’t undefeatable – nor are they anything new. Still, each business owner will find themselves confronted with them in some form or another. Being prepared to face these challenges head on will increase your odds for success if you know what could be around the bend.

John Meyer is head of Strategic Partnerships/Marketing at The Company Corporation. He is passionate about helping entrepreneurs and connecting them to resources that help them thrive. He is also a political strategist and art collector in his free time. Follow him at @Company_Corp.