Your Companies Risk & Return

When starting up a business important factors to consider are the risk and return. You could say that starting your new business is a bit like a civilised version of war. In this case, companies, not countries, are the rivals you risk taking on. But, with the potential return there to be achieved, are you willing to take the risk that could provide return?

 

The risk attached to an investment is a way of describing how likely it is to lose money. But if you really let that thought get to you then perhaps a job stacking shelves is more your thing, with the only risk coming if you take the third and final step on your step ladder when stocking up. Not that we recommend falling off and breaking your ankle…

There is a risk in every walk of life, but whether you’re ready or indeed want to take the plunge is something that only you can decide. Perhaps you’re considering trading in your car? But can’t quite afford it just yet. Thus, you may be playing the waiting game while saving up for that brand spanking new motor. A risk, or just being sensible?

Buying shares in a new company, on the other hand, may be considered very high risk: there is a possibility that the firm’s products or services may not succeed, which could lead to losses for shareholders.

However, the potential returns for low-risk investments can be lower than for high-risk investment.

Whilst the value of any investment can often go up and down, returns could be much higher over the longer term if a firm is a success or if it is bought by a larger rival.

 

At the end of the day, risk is often boiled down to your current financial situation. Often the hardest part of starting a business is raising the money to get going. The entrepreneur might have a great idea and clear idea of how to turn it into a successful business. However, if sufficient finance can’t be raised, it is unlikely that the business will get off the ground.

Thus, when you are making business investment decisions, you need to establish your attitude to risk. Often, by taking on more risk can you give your money the opportunity to grow over the long term and really make a success of your company now and into the future.

Alternative finance could hold the key to funding and expanding your business. For many small business owners, access to large funds from traditional lenders can be somewhat restricted for future planning. Is your business one in three that have reported difficulties in securing business loans?

The alternative funding approach is proving particularly popular with startups. Businesses under five years old are as likely to select alternative finance methods to secure capital as approaching banks. This is key for direct investment in businesses, including stock purchase, expansion & refurbishment funds and equipment purchases – not only that, alternative funding is potentially accessible at a faster rate than your traditional loans.

Often in the small/medium business world, the alternative funding option is a viable route that potentially carries success. Aurora Capital eradicate the risk and maximise the potential for success by assisting UK businesses rase the capital they require as well as a suitable product for their organisation!

If you would like to get in touch and find out more information on alternative funding, please call the team on 01371 870 815 or email info@auroracapital.co.uk. Turn the risk into return today with Aurora Capital!