Minimise Speculation Losses With These Tips

Any business is started with a dual motive of earning profit and growth in the near future. It is very important for any business that expects growth in the future to take some speculative risks, but not all risks result in profits, some even result in heavy losses. It is very difficult for any business, especially small businesses, to handle and manage these losses. This article will provide you with some business growth tips that will allow you to take speculative risks without worrying about losses. These small business growth tips will help you minimise speculation losses and expand your business.

How To Grow a Small Business?

The very question that every business owner has in their mind's ‘how to grow your business. Following are the steps that you must undertake to grow your business:

• Take the risk: The statement 'higher the risk, higher the return' is true for any business. If you want to grow your business, then it is very important to take calculated and speculative risks.
• Community awareness: It is very important for any business to serve back to the community as the community offers the business resources, customers, profits, etc. Spreading community awareness through charitable events will help in attracting new customers and create a positive profile of the business.
• Use various communication channels: Today, customers are widely spread on various social media platforms. So, the social media presence of the business is a powerful tool to target customers, and create brand awareness. Various social media insight tools allow you to identify trending keywords, gain knowledge about customer behaviour, and answer customer queries.
• Offer the best customer service: Every brand is spending a lot on offering great customer service to customers. Spending extra to provide the best customer service will help you retain customers for a longer period of time. These customers even provide a word of mouth promotion that helps business in getting new customers.  

Now that you are aware of the primary step for business growth, which is taking a risk, let’s talk about the losses that are associated with the risks.

Speculation has both pros and cons. If the speculation turns out to be favourable, then it will help expand and grow the business, but unfavourable speculation might turn into heavy losses. Avoiding losses is impossible, so use these tips to minimise losses:

1. Place a stop loss

Whenever you are taking speculative risks to grow your business, then do place a stop loss, which is the maximum amount of loss you can bear. Once the business hits the stop loss amount, then no further risk should be taken without consulting any professional.

2. Proper preliminary research

The most common reason for the business loss is not conducting proper preliminary research. Preliminary research helps businesses understand their customers, target market, growth opportunities, threats, strengths, and weaknesses. Proper research helps a business in finalising the amount of speculative risk to be taken. It helps the business to focus in one direction, that is growth.

3. Keep enough cash reserves

Businesses in lieu of taking risks often use all their cash reserves that result in shortage when there exists an opportunity, and cash is actually needed. To minimise losses while taking risks, always keep enough cash in the business to capitalise on upcoming opportunities. This capitalisation on upcoming opportunities will help in reducing the overall loss and also act as a saving for the business to overcome unforeseen problems.

4. Seek professional advice

If you are confused about investing, then do seek professional advice from a market specialist who can help you with the risks involved. They can help you in dividing your investments in such a way that you get good returns while bearing minimal risk.

5. Never put all your eggs in one basket

When taking speculative risks, do make sure to divide your investment into various schemes. Putting all investment in a single scheme might result in heavy losses. Dividing your investments into different products and schemes is the best way to reduce risk, and create a high-return risk-free investment portfolio.

These are a few business growth tips to expand your business while minimising the chances of speculation losses. Business growth is an important part of any business for which you have to take some speculative risks. It is not possible to completely avoid losses, so use these small business growth tips to minimise your speculation losses. Here are a few frequently asked questions to answer your doubts.

Also read:

1) Business Success Tips Every Business Owner Should Know
2) Top 10 Businessmen in the Industry & What You Can Learn From Them
3) Tips for Work-Life Balance for the Modern Businessperson
4) How to get your business listed on the Stock Exchange?
5) OkCredit: Simple, Paperless & Secure solution for businesses

FAQs

Q. Is it important to set a target niche for my business?

Ans. Yes, It is really important to set a target market and target audience for your business as it allows you to focus your marketing communication and strategies. A target audience is a set of individuals who share a similar set of needs and characteristics, and are the consumers whom the business is going to target. Setting a target niche for your small business helps in the following ways:

• Creating specialised brand messages.
• Preparing marketing and cost-related strategies.
• Allows the business to use the right channels of communication as different channels of communication are useful for different audiences.
• Specifying the target audience and market helps in developing promotion techniques like free products is effective for lower segment markets.

Q. Why should speculative risk be divided among a portfolio of investments?

Ans. It is always advisable not to put all your money in a single investment as it heavily increases the chances of losses. Dividing your money into different investment products and schemes is the best way to reduce risk, and create a high-return risk-free investment portfolio. A high return on one investment helps match the low return on another investment.

Q. How to grow a small business into a large business?

Ans. All small business owners who want to grow their small businesses should follow given small business growth tips:

• Know your current users and develop good relationships with them
• Provide the customers with the best possible customer service like home delivery service, complaint resolution service, etc.
• Provide your current customers with referral benefits so that they refer to more people and your customer base increases
• Always keep an eye on upcoming and new opportunities, and take the first-move advantages before other competitors
• Use social media to provide quick complaint resolutions, promote your business, and connect with the audience
• Try organising charitable activities and events to create a positive impact in the mind of the customers. This will even help in community brand awareness.
• Keep an eye over various channels of communication to answer all the negative comments before they create a negative image of the brand.

Q. Why is preliminary research important to minimise speculation losses?

Ans. It is the most common reason for losses as people often invest without research that leads to negative returns. Proper preliminary research helps the business in finding the best investment opportunities that help in reducing the chances of negative returns. Preliminary research even helps in the growth of the business by providing the threats, opportunities, strengths, and weaknesses of the business. Conducting proper preliminary research even helps in finding upcoming opportunities and taking the first-move advantages before other competitors.

Q. Which is the best staff management system that I can use to manage the growth of my small business?

Ans. OkStaff is one of the most effective management systems for tracking employees' performances, attendance, salaries, reports, progress, among other things. It is a digital application that allows you to save employees’ personal information, and maintain a proper employee database. OkStaff is a 100% safe and free application available on Google Play Store that provides you with enormous features like an attendance sheet, salary system, confidentiality feature, etc.