Report question

Note: your identity will not be shared with the person who sent you this message.
This field is required

How should a start up navigate unstable regulations?

This question is especially for business in the third world where taxation, regulations, currency and government amongst others are unstable even as they are critical to the survival of startups

Sign in to answer

2 answers

It helps if you can join or form a larger group or coalition of entrepreneurs in your country. There is more power and influence in numbers and once formed, you have to make connections with someone in the political establishment. Therefore, try and join some group that actively connects or lobbies the government on your behalf.

Here in the United States, many small business owners join something called the Chamber of Commerce and the Chamber has dedicated staff who meet with elected officials. They represent thousands of small business owners who cannot represent themselves before the political system that impacts how they conduct business. This is a common approach for managing risk – partner with larger groups so you spread the risk out amongst a larger population as opposed to you alone taking on the risk yourself.

Businesses also mitigate potential risk. For example, if you expect new taxation on supplies or new regulations that could restrict supplies, then it becomes important to have alternate sources since you could experience disruptions. It also becomes more important for your startup to be online – connected to the outside world as opposed to being captive to a single location with little or no connections. You do not want to depend on a source (including the government) that operates in a highly unstable environment. You have to go “outside” to protect yourself from the internal chaos.

Putting some “diversity” into the business becomes very important; including looking at alternative products or services as well as not depending upon a single product or a single customer to sustain the business. You want to build in some options or choices with the business. People who have options and choices in life have a much easier time surviving as opposed to someone with no choices in life.

Whenever a risk is rated “high” in terms of probability of occurrence and “high” in terms of its impact on the business, then you have to do everything you can to avoid it. Sometimes you have to make a very difficult decision. You have to relocate and do business in another state or country. If your situation becomes too difficult and the business cannot function in some reasonable way, then you may need to consider moving. Unfortunately, I think this could become the new reality for some given the rapid change now occurring across the world. Once again, I would have a contingency plan just in case you reach this point. You need backup plans to cover those risk that are most likely to impact your business in a serious way.

Report Matt's answer

Note: your identity will not be shared with the person who sent you this message.
This field is required

Mngutor hello. An unstable business environment represents risks. You have to learn how to manage them, starting by identifying the key factors and variables. Next to evaluate and prioritize them, considering probabilities, biz impact, etc. Analyze and describe in detail how to neutralize and/or handle those risks. Then write down a backup / contingency plan, based on your current business plan. Other option, if your budget allows, is to hire a risk management expert to do the work. These links may be handy: --- https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2021/02/23/14-smart-ways-to-manage-business-risk/?sh=4cb1939acf4e --- https://www.investopedia.com/ask/answers/050115/how-can-companies-reduce-internal-and-external-business-risk.asp --- https://www.sba.gov/sites/default/files/files/PARTICIPANT_GUIDE_RISK_MANAGEMENT.pdf --- I wish you the best.

Report Miguel 's answer

Note: your identity will not be shared with the person who sent you this message.
This field is required