Almost always there is a certain amount of risk involved in starting a small business. According to the Small Business Association (SBA), more than half of new small businesses close within five years. Behind these statistics are troubling tacit financial crisis, credit ruined, strained relationships, and personal stress that can accompany a business failure. Take steps to minimize the risks of starting a new business is good business practice, if done correctly, can save a huge amount of headaches and pain on the road.

To that end, here are five tips to follow to minimize the risk of starting a small business.

1. First define risk. Before starting your business, or as soon as possible, take a piece of paper (this can be done electronically, but by taking the time to write, the more real for you) and make a list of all risks can start a business in order of priority as they look now. Why is this important? It will give you perspective and help you focus on these risk areas that are already aware.

2. Create minimoimiskeinoja the risks mentioned. Now that I have presented some of the risks of starting businesses, developing a plan to minimize them. Here are some examples:

To protect your personal property: Do not sign personal guarantees on any debt of your company, especially if you use a sole proprietorship or a corporation. Also be sure to consider taking property and liability insurance policies.

To help ensure you have enough income to live: if you start a new business are the chances that you will not generate enough income to pay right from the beginning. You also have to cover startup costs. To help minimize this risk, you can maintain an income stream on the side (or else, keep your day job and launch your new business on the side, until the company is more profitable). You can also expect to start the business until you've saved enough money to cover living expenses at the beginning, or take a small loan for this purpose.

Protect your work and private life: If you are married, be sure to check with your spouse and other family members, how to start your new business. Running a business typically requires more time and energy to work with the employer and may be associated with odd hours too. This can strain relationships. If you are afraid of too wrapped up in your company, then create some of the natural distinctions, how not to work at home, and if you try to distinguish your work area as much as possible from residential areas. You can also enlist the help of family and friends to keep you from overdoing it on the work program.

3. Make sure your business is a good fit for you. What experience, training, skills or knowledge that you are the owner can do this work? Make the effort to enter the industry and has chosen a business model that suits you and your strengths and abilities. Also, if you lack capacity to manage the industry or business, you can do business with others who have it. Also, make sure that the business idea fits your personality. You can not drive a restaurant, if you do not like the food, and are struggling to sell the service, if you avoid social situations. Finally, you have the time available and the commitment required of your company?

4. Make sure you know how to manage the company. Have you received formal management, corporate finance, marketing or training? Otherwise, it is important that you learn the basics of the capital and its own business. There are numerous free business how-to articles, webinars and online tutorials available through the SBA, or score, for example, that can help bridge this information gap. In addition, it is important that you get a mentor. Or ask someone you know to help you, hire someone, or to consider tapping the resources of groups like the score, and micro and Mentor to offer free advice and mentoring services.

5. Make sure you have done your research. Countless small businesses will disappear into oblivion, because their owners have not invested enough time and money on market research, product development and business planning. So that they are in contact with their target market and are able to establish a niche rather than respond to changes in consumer attitudes. Those who can not, as owners of small businesses do not adequately evaluate their competition.