Whether you’re going all-in on a game of poker or handing in your notice on your long-term career in order to pursue a business idea, taking risks can be scary. So, it’s no surprise that many people tend to avoid taking risks wherever possible because it’s often the safest option. But, most successful people will tell you that the only reason they were able to get to where they are today is that they were willing to take the risks that most other people would not. Whether it’s investing a sum of money that others would think crazy or developing a product that the people around you were skeptical about, taking risks is essential to business success.
That being said, risk-taking can still be quite intimidating, particularly for those new to entrepreneurship. Keep these five tips in mind to help you begin to feel more comfortable when you take risks and make more informed risks in general.
If you aren’t willing to take some risks, the simple fact is that you are likely going to struggle with being an entrepreneur. Entrepreneurship and risk-taking are intrinsically linked to one another; you will most likely need to be prepared to put some of your personal capital into a new business, and you’ll have to put your reputation on the line with an idea that’s not yet been proven. And in most cases, entrepreneurs go without a steady income for at least the first several months. Every decision that you make as an entrepreneur carries some risk; your strategy for lead generation might be a waste of time, your amazing new employee might quit after a couple of weeks or a new approach could alienate one of your best clients. It’s important to be ready for all of this, and accept risk as part of the deal.
As an entrepreneur, there are two different types of risks you’ll be taking; calculable risks and ambiguous risks. Day trading, for example, is a calculable risk which involves a series of unknowns that allows you to come up with a reasonable prediction for the odds of success. Day trading lets you work for yourself and if you’re prepared to take risks, it can be an ideal and lucrative business idea. On the other hand, many other business risks are ambiguous risks, which involve some knowns and some unknowns. Most business risks will land in this category, because there are so many factors, like economic shifts and consumer behavior, that can be difficult to predict.
Taking risks is all good and well when they pay off and you get to reap the benefits, but sometimes, it’s important to be prepared for the fact that your risks just might not go the way that you’d hoped. Even the most carefully thought-out and calculated risks can sometimes fail; it’s important to accept and embrace the possibility of failure and turn it into a positive rather than becoming more apprehensive towards risk-taking. When taking a risk fails, it can often provide you with valuable information on how to change your approach next time.
Some of the risks that you take will not hold a huge amount of weight for your company. For example, you might hire somebody who leaves after a month, but while it’s inconvenient, it won’t close your business down. But some risks could make or break your business; they are the biggest differentiators between success and failure. And because most people are unwilling to take risks, those who are – and their businesses – will naturally stand out in the crowd.
Risk-taking is part and parcel of being a successful entrepreneur, from the smaller risks you take to the huge ones that could define your business’ future.