Deciding not to specialize was another risk management decision. It's great to have those vast inherited collections of books about trout fishing, but then you have to know something about that area. Similarly, I avoid sports pretty much (sorry) because I'm not interested in it. That means for us that at the risk of losing the avid collectors in these areas, we've chosen to appeal to a wider audience. In my opinion, the larger the customer base, the lower the probability of some disastrous drop in some subject that causes your sales to stall.

When we decided to sell books beyond the United States we took a number of steps to mitigate risk. We figured out the best way to ship books depending upon their weight and value and size, we insure them against loss and we do not sell to the usual suspect list of countries which seem to house the greatest number of book thieves. We've taken a hit from time to time, but most has been covered by insurance.

The other aspect of selling abroad (both from US sites, like amazon.com and European sites like zvab.com [Choosebooks]) is the currency market. Currency rates related to each other are not fixed; currencies are and can be manipulated so that their goods cost less money. In a currency war, large swings beyond the usual ups and downs of the foreign exchange market can occur, either making your off-shore sales currency holdings worth more or less.

We mitigate that particular risk by taking care of our own foreign exchange trades and then moving money from one currency to another when we can do better. At the same time, we are maximizing our sales by exposing our inventory to European and Asian markets.

Perhaps the most extreme risk management tool we are using is to drastically reduce our costs by my taking a job. I discovered that in fact I could run the business pretty much at night, with the help of an assistant during the day and my husband handling the shipping and receiving. This enabled me to take a job writing grants for a non-profit agency which covers our two biggest bills: the mortgage and our health insurance. That means that even when sales took a real dip during the economic drop - and they certainly did - we were never in danger of losing our business, not to mention our home. And, as a special bonus, I do have the satisfaction of doing work clearly for the benefit of the community which is very much needed.

Managing risk also means doing the bread-and-butter activities, like backing up your computer, training other people to run the business in the event of unforeseen events and keeping your inventory safe from the environment.