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One of the success traits that seems to be common amongst many prominent business leaders is this - their risk taking abilities. Basically, it all boils down to this - do you REALLY believe in your business idea? If so, then why not go for it?
Risk taking, contrary to popular opinion, is not as dangerous to balance sheets as it seems to be as long as alternatives are carefully and thoroughly studied before any decisions are made.
Small Business Management - The Disadvantages of NOT Taking Risks
There are actually more disadvantages than benefits to be gained from complete avoidance of business risks.
Stagnant Growth - The only thing that's constant is change . Without risk taking , you or your company will not be able to keep up with your competitors, who, unlikely you, are taking risks each and every time they change their brochure, put out a new ad, re-package their products, change the color of their logo, invest in a new office, etc.
Decreased Sales - Worse than no growth is declining sales. Taking risks in terms of product innovations, marketing strategies or just about anything that involves your small business can easily lead to increased sales. Avoiding risks however, will naturally have the opposite reaction. Remember, consumers are essentially fickle. How long do you think you can afford to not change anything?
Lost Opportunities - If you're lucky, some small business opportunities may come around more than once but most of the time, they just don't. And if you let each and every opportunity slip your hands... somebody else will get their turn, take the risk ... and profit.
Still not sure if you want to take that risk in your business? Ask yourself these two important questions.
How do you feel about the risk personally? Sometimes, all you need to do is consult what your gut tells you.
What are its long-term benefits and disadvantages?
In case, your gut feeling is not enough because of the huge risk you want to take in your business, QUANTIFY the risks long-term benefits and drawbacks. This is called intelligent risk taking. If you can measure the outcome of the risk then you are able to decide better.
Life is not without risks and instead of worrying about how BAD things can go, analyze the risk, quantify the pros and cons and THEN make your move. Good luck!
Action Steps to Becoming a Risk Taker
- What do you want to risk?
- Gather the facts to support that risk.
- Prepare a contingency plan if you decide to take that risk and you end up in hot water.
Important Points to Becoming a Risk Taker
- Listen to what your gut tells you... but make sure that it is supported by facts too.
- Think about the short- and long-term impact of the risk you want to take to your business.
- How much better will your business be if you take that risk?
- How worse will your business be if you do NOT take that risk?
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