Step 3. What could go wrong? Examine your risk factors

Product Risk:

Things that are specific to your service and that you can tackle.

This includes things like available software and your output. Getting this part right falls squarely on the shoulders of the up-and-coming entrepreneur.

Market Risk:

The risk inherent in any business venture.

Can you ultimately carve out enough market share for your business to be viable? Will customers stick around long-term? Are people willing to pay you enough to stay profitable?

It’ll be difficult to examine complete market risks and competitors at this stage in the game, but you already know you have a problem people need you to solve. You’ll touch on deeper competitor analysis in chapter 5.

When considering product risk, consider that being a service-based business means the main product cannot exist separately from you. Therefore, your product risk evaluation is going to take a more personal tone.

• How much work can you realistically take on?

• When there’s an emergency, what's the contingency plan?

• Are there extenuating circumstances (health problems or familial responsibilities, for example) that may prevent you from doing as much as you’d like?

What we each need to deliver a great product will look wildly different. Don't push aside anything that's important for you because it feels outside the scope of a business need.

• Do you need a tax advisor?

• To work on your soft skills?

• A pricey software subscription you've been avoiding?

• Access to regular healthcare?

Whatever you need as a person is a business need, too.

"I bet mountain climbers feel the same way when they’re asked how they conquered a major summit. The answer is both incremental — you succeed by placing one foot in front of the other, of course — and more pragmatic, in that the journey is always broken into multiple, distinct phases.” — Neeraj Agrawal, The SaaS Adventure