DON’T GET COMFORTABLE! WHY YOUR SME SHOULD BE TAKING STRATEGIC RISKS
Hey, this is life Jim – and it is just as you know it! Yes, get used to it. As a business owner you’re always going to be taking risks, whether it’s hiring someone new, taking a lease on a new office, or something as simple as taking out advertising space for that new product launch.
Risk taking is inherent in the running of a business, especially in the early stages. In fact, not taking any risks at all is a fairly quick way to ensure your business stagnates or crumbles. Risks should be embraced, calculated, analysed and well thought out. But remember – without risks there are no rewards.
Taking risks is scary
Risks by their very nature pose some element of threat to the safety and security of you and your company, and for any risk-averse individuals it is often difficult to choose risk over the predictability of safer options when making decisions about your business future.
However, risk is almost a differentiator between those who succeed and those who fall behind. The biggest businesses in the world have got to where they are because of the opportunities they have taken and turned down. Atlassian and Facebook going public are prime examples, and the huge successes at either end highlight why risk taking can and should be embraced under the right circumstances.
The importance of proper evaluation
On the flip side, when taking risks there is the potential for things to fall apart and go horribly wrong. If you’ve had the inclination to start a business then risk taking is something you are open to, and perhaps you find being “comfortable” not an option. Do a good analysis on your risk, with qualified advisors and lessen the impact of failure as much as you can.
Careful examination of risks and a clear logical mindset are two of the most valuable assets in terms of keeping bad business decisions to a minimum. By identifying potential losses and comparing these to the likelihood and size of gains, you can make a more informed judgment about whether or not a risk is worth taking. Determining ways to manage and mitigate risk is also crucial to properly evaluating and minimising downturns.
When it comes to something major like choosing a new business partner, there are often various risks entailed. Such a decision can be looked upon as if it were a marriage. You will go through extreme highs and lows with a business partner, and as such this decision should be approached with meticulous thought and caution, and not rushed into.
How to follow up risk
Taking a risk more often than not involves a large financial component. Like anything in life, it all boils down to money. So tread carefully.
If you don’t believe in yourself, who else will? Sell yourself and your business and appear confident, regardless of how shaken and fearful your latest plunge may have made you feel. Remember in times of uncertainty, surround yourself with people who believe in your business, encourage your abilities, and know to ask the right questions of you in your decision making!