Guidelines on Managing Risks and Uncertainty

1. Guideline 1: Plan Before You Act
   To begin with, entrepreneurs should have built their own information base. Having the necessary and accurate information in hand help the entrepreneurs plan well. Planning would help reduce the uncertainties and weigh the risks involved. These allow the entrepreneurs to take calculated risks and avoid taking unnecessary actions.
2. Guideline 2: Constantly Seek Information
   Continuous search for new information and updating current information base, help entrepreneurs to confirm if their business strategies are on track or if changes are needed to handle the new risks identified. Avoid making decisions based solely on sheer optimism.
3. Guideline 3: Control the Degree of Investment
   One worry that plagues most entrepreneurs is whether they would have sufficient funding. Controlling the extent of investment in assets with low salvage value is one way of managing this risk. The entrepreneur could lease these assets rather that purchasing them. Additionally, it would be good if the entrepreneur could ensure there is sufficient demand for their product/service before making huge investments.
4. Guideline 4: Share Risk with Others
   Handling risk all by themselves would be a great burden for entrepreneurs. It is advisable to seek out investors who are willing to absorb that risk who in response, would expect a greater portion of return. Investors such as venture capitalist often diversify their investment portfolio. Thus, their risk is spread out to unrelated projects and they are better able to protect themselves from burning their fingers.
5. Guideline 5: Be Flexible
   Being rigid with the adopted strategy is definitely a risky step to take. An entrepreneur should be flexible enough to change strategies when the situation requires it. Not only it does it minimise the risk of loss, but it also allows the firm to grab new opportunities that arise.