What are the key ingredients to making a success of your start-up?

As a team, we have spent a lot of time in the company of different venture capital and business angel investors.  Consequently, we have developed a bank of knowledge about what works and some of the root causes of business failure. 

The billion-dollar business question is “What makes a business successful?”  

On the assumption that you have a killer idea: that unicorn in the making; what can possibly go wrong? The answer is a lot!  A horrific number or small businesses don’t make it to their second birthday despite having a killer idea.

There is one common attribute that all successful businesses have.  At Board Originator we have coined the phrase: “Stage-appropriate governance”.  Excellent governance is all about anticipating problems and making a plan to work through them.  That means risk management which is where Board Originator comes in.  

To be successful in business you have to take risks but you also have to manage those risks. Otherwise, you are simply rolling the dice and the odds are stacked against you.  

To manage risk you need to know what the risks are; and plan.  Start by drawing up a list of the various risks that you are likely to face and then categorise them into probability (low, medium or high) and impact (low, medium or high).

Once you have done that, start with the high-impact-high-probability ones and make a plan to mitigate them. Then work your way down the list.  Some risks you can insure against – typically Low-probability-high-impact risks.  Others you have to mitigate differently.  Some you just accept.  

The good news is that when you get to the low-probability-low-impact risks, all you need to do is keep an eye to see if their score changes in the future.

This should be recorded in a risk register where you record this work.  The risk register should be item one on the agenda of every board meeting.  

You now have a risk framework, also known as a Board Assurance Framework.  Investors will be massively impressed.

What kills businesses?  Unmanaged risks: often glaringly obvious in hindsight but sadly overlooked.

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