“You can’t run a business without taking risks. The brave may not live forever – but the cautious do not live at all!” Richard Branson
Well, Mr Branson sums it up quite nicely in just two sentences, but I want to look deeper into the benefits of taking risks and pushing your comfort zone where growing your business is concerned.
I always say in my networking circles and to my clients that run their own business, ‘we’re all entrepreneurs, we’re all risk takers to some extent’. You wouldn’t be in business if you hadn’t taken that initial risk of going it alone, in fact you’d still be working for someone else who did take that risk!
Are you prepared to take risks?
I would go as far to say that change doesn’t happen without taking a risk, but what kind of risks are we looking at? Every step change I discuss with my clients involves an element of risk…
They don’t have to be massive risks that make entrepreneurial headlines. We’re not talking about high stakes gambling or daredevil stunts here, but the daily risk any business owner faces.
That could be, taking on a new client, balancing your cashflow, speaking out on social media, how to manage your staff, when to take time off and the list goes on.
If you feel you want to take risks to make a change, are you prepared?
Calculated risk taking in business
There are actions you can take to weigh up the value of the risk. The first step in calculating whether to take it or not is usually to understand your own limits. Understand your comfort zone and how far you’re willing to push those limits. Then weigh up:
Cost vs gain. How much will it cost you, and how much will you gain from it? Remember, cost needn’t be financial, it might be reputation, time, or compromises elsewhere.
Consider the likelihood of the risk becoming a reality and if it did what would be the consequence to you or your business.
Next, put some key performance indicators (KPIs) in place. Make them SMARTER – where the specific, measurable, achievable, realistic, and time-bound parameters are followed by evaluation and revision.
The final step is often preparing yourself that every decision won’t be right, BUT every outcome is a learning point for the future – repeat, tweak, avoid again. Understanding that what might be perceived as failure is indeed a learning point, makes you more resilient, and potentially prepared to take larger risks for greater change.
Tip: Plan ahead. Make a roadmap to identify potential risks and have an action plan in place. Use your 30 / 60 / 90-day plan to highlight things you know are coming, so you can mitigate.
Evaluating and revising your risk, change and gain
Reflection, debriefing, retrospective analysis, or evaluation and revision, however you want to describe it should always occur after risks have been taken and the outcome is becoming clear.
Some questions you can ask yourself, your team or board members…
- Is the outcome imminent?
- How long has it taken to get to this point?
- How much longer before the outcome is clear?
- Have the changes so far been of a high enough gain?
- Is the cost still acceptable?
- Have we achieved the KPIs?
- What went wrong?
- What went well?
- Did I rely on the right people or tools to help?
- How far out of my comfort zone am I? Or have I pushed others too far or not far enough?
Undoubtedly, you will set your own evaluation questions when you begin calculating the risk. However, I hope this gives you some direction.
So you see, successful entrepreneurs are those that are willing to take calculated risks, with the goal of making a step change to ultimately grow their business.
As always, I hope I have given you the confidence to make your next step change and have maybe changed your perspective on risk taking. I’m here to offer further support with my free business resources, or as a business mentor. Feel free to get in touch for an informal chat about your next move – maybe that’s your calculated risk for today!
Let me leave you with a final thought from our friend Richard Branson… ‘Every risk is worth taking as long as it’s for a good cause and contributes to a good life.’