Risk-taking is almost synonymous with entrepreneurship. To start and support your own business, you’ll have to put your career, personal finances and even your mental health at stake.
ImportantSuccessful entrepreneurship involves taking risks. If you don’t embrace risk-taking, you may want to rethink being a business owner.
While you can be irresponsible in your risk-taking and need to be careful, that doesn’t mean you should avoid any risky investments or ideas. You need to embrace risk as an entrepreneur, as long as you do so in a responsible and informed way. In order to achieve true success, you must rely on innovation and use new ideas to achieve your goals.
Actually, the entrepreneurs behind some of the world’s most successful corporations have one thing in common: They’ve all embraced the positive potential of risk taking. As an entrepreneur you have to be willing to be brave, jump in and take risks.
Without risk, there is no reward. It’s that simple.
Most business owners must learn how to take calculated risks, it may not come naturally, but just like everything else, if you want to succeed, you will learn the trait.
Recognize the value of risk in business. Risks open the door to many prospects. Risks bring change.
ImportantMost successful businesses took great risks not because they were reckless but because it’s the only step to take to move forward.
To feel more comfortable taking risks and make more informed risk-based decisions, keep these five considerations in mind.
Risk Is Always There
Risk-taking is inherent in entrepreneurship. Leaving a steady-paying job to start your own business is a risk in and of itself. Entrepreneurship is fundamentally linked to risk-taking.
There are risks involved in hiring employees, marketing strategies, and even customer service. Entrepreneurship overall involves a great deal of risk, and you need to be ready to take these risks on before deciding to go into business.
If you aren’t prepared to take risks, you have no business being an entrepreneur!
WarningYou’ll stake your reputation on an unproven idea. It’s basically a hit or miss and the success rate will depend on your creativity and perseverance.
Risk is part of the DNA of entrepreneurship — from the personal capital you invest, to the daily business decisions you have to make. The more you accept that, the easier it is to live with.
True entrepreneurs take risks!
ImportantRisk-taking identifies you as a leader and shows other people you’re ready to take charge and make decisions. Risks force leaders to do away with their fears and take strides to the future of success. Someone who’s a follower is willing to let others take the big risks.
Everyday Is Day One
Jeff Bezos didn’t have to take a risk — the Princeton University graduate had secured a high-paying job on Wall Street. However, Jeff Bezos felt called to entrepreneurship. In 1994, he risked it all by sacrificing his job in finance to found Amazon, which began as an online bookstore run out of his garage. Jeff Bezos’ extraordinary story demonstrates how taking a leap of faith can lead to staggering successes.
Risk Drives Innovation
Innovation can’t happen if you will not accept the risk that your undertaking might fail. Innovation involves changing how people do things. It is about sharing and teaching what we know, and putting new ideas into practice.
Innovation starts with risk.
Companies would never develop new methods or products if they didn’t take risks. Taking risks allows true innovation to occur instead of simply doing what companies have always done and never building on those traditions or making new ones.
ImportantInnovation is what pushes industries forward and entrepreneurs are often the ones at the head of the pack when it comes to innovative ideas. Do you just want to have a mediocre business or do you want to be an influencer in your industry, who invents new products and ways of accomplishing tasks?
WarningAs customers’ demands change, so should the products or services that a business offers. Continue to change for the better with new and fresh ideas, that’s the only way to be innovative. While tossing in something new is quite uncertain and therefore risky, it will help you move forward and see what will work and what will not.
Leave your comfort zone and embrace uncertainty.
The world outside your normal zone can be intimidating but until you take that risk and put yourself into that space, you’ll never reach your potential.
Arianna Huffington has always been a self-starter. By 2005 she had penned a number of successful books, starred in a TV show, and built a career as a successful journalist. When she proposed launching a new media platform, she was discouraged by naysayers even within her own family, who warned her to be wary of failure. Instead, she put in the hard work to gain investor buy-in and build the first opinion-based online news outlet of its kind.
Risk Is Your Best Teacher
Some risks may not pay off, but an optimistic risk-taker will always look at failure as an opportunity to learn. It’s important to know how to learn from your mistakes so you can grow as an entrepreneur and as a person.
It’s clear that not all risks will pay off but a determined entrepreneur always looks at downfalls as an opportunity to grow and learn. You’ll learn something valuable when you take a risk, regardless of whether you succeed or fail. Even if you fail with your risk, learn from the experience.
ImportantIf you take a risk and it fails, acknowledge what went wrong so you don’t make the same mistake again. Instead of pouting over mistakes, learn from them.
Taking risks gets you one step closer to your success.
Taking a risk and it not paying off will mean you’ve learned what not to do. Ask yourself why something didn’t work out and get at its root cause. Is it a bad habit you can break, a flawed process you can change, an ego you can tame, or a toxic relationship you can eliminate?
Do not let failure get you down; it’s a natural part of being an entrepreneur and it just means you need to keep working hard.
InfoSocial Media Examiner writes that the willingness to experiment with new ideas is key to business growth. As they put it, “nothing ventured, nothing gained.”
Take The Leap
Just do it! After you weigh all your options, implement a plan and just watch it unfold. The result could be different than what you had predicted. The result could be a failure or a complete success. Regardless of the result, you need to continue taking risks because it builds confidence and brings success to a business.
Risk Is a Differentiator
Some risks offer the promise of higher value. Some risks offer smaller potential consequences than others. Some risks could make or break your business. But there’s one key element all risks have in common: They’re differentiators.
ImportantMany entrepreneurs avoid taking risks because they are afraid of the repercussions. This fear holds them back which results in less competition for those who take risks and at the same time puts them in a favorable business position.
Because most people are unwilling to take risks, the risk-takers of the world naturally stand out in the crowd, and as we all know, entrepreneurs and businesses that stand out are the only ones with a shot at breakout success.
Even if you end up failing, you’ll end up “failing in style”!
The more risks you take, the more you will lose that fear of failure. And if you can navigate this common block to success, then the sky is your limit.
ImportantFailure isn’t the end. It’s the beginning. Focus on the known factors when you can, accept ambiguities — and understand that failure is never the end of the road.
Microsoft would not have made it at the forefront of the gaming industry if not for their iconic gaming console: the Xbox. In 2001, when the Playstation seemed to dominate the gaming console market, Microsoft decided to go up against it with Xbox. This is not only the risk they took but also they spent twice as much of their marketing budget. Now, Xbox has become a staple for console gaming, already on its 3rd generation unit with the Xbox One, and has sold more than 24 million units in 2016.
Risk Is Relative
Risk-taking is associated with personal satisfaction. Highly calculated or potential business breakers, the risks you take are what move you in uncharted directions to find the space to build something truly great and unique.
ImportantIt is believed that people who have the willingness to take risks are more satisfied with their lives. As the saying goes: regret of neglected opportunity is the worst hell that a living soul can inhabit.
Be aware that there’s not a lot of real risk sitting out there for you.
If you have your health and the people you love around you, and you’re smart and talented, then nothing else really matters. If you create a business and it fails, you can always start another one. You will still have the most important things in life to pick you up and help you rebuild.
We’re inherently biased toward predicting disaster.
- The first bias is that we tend to exaggerate the possibility for failure. In raw estimates, people tend to pessimistically predict failure more than real situations would warrant.
- The second bias is that we greatly exaggerate the consequences of those failures — we envision the worst-case scenario, when the reality is far more manageable.
Entrepreneurs are not risk-takers. They are calculated risk-takers. These individuals do not just gamble everything into their venture—they find ways to reduce risk as they move forward with their business. When faced with a risk, it does not mean that you’ll immediately take the bait, of course, it’s mitigating the risk if possible as you work on conquering the obstacles along the way.
Understanding how successful companies approach risk and applying some of their strategies can help you accomplish what they have achieved.
ImportantNot going out of your comfort zone and being contented with a small milestone won’t allow your business to reach its true potential, unless you embrace risk. If you can’t handle the idea of taking a risk, then you shouldn’t have ventured into a business in the first place.
New opportunities and innovation will come if you have an appetite for risk.
Focus on the known factors when you can, accept ambiguities — and understand that failure is never the end of the road. Some of the most amazing minds have failed the first few times. But they kept taking risks until they stopped failing. That’s how it’s done.
How we respond to short-term failure is what determines our long-term success.
WarningSuccess doesn’t land in anyone’s lap. You have to work for it, and actively chase it. Take the first step, and keep going.
To future-proof your company from disruption, you’re going to have to take some risks – and make some mistakes along the way.
Risks shouldn’t steer you away from pursuing entrepreneurship whatever it costs. Risk is a choice.
Instead, see them for what they are: necessary obstacles on a greater path. There’s no way to avoid the risks you’ll face as an entrepreneur, but by recognizing them, you can prepare for and mitigate them.
You need to be at ease with the fact that you may not know how you’re going to get the results you want. You have to experiment along the way.
Are you ready to embrace risk as an entrepreneur? I’m curious to hear your thoughts on the matter. Leave a comment below and let me know your take.